Siemens, Germany's largest electronics group, warned yesterday that its semiconductor business was likely to make further losses next year and that it was considering deeper capacity cuts, including plant closures.
The company, which has suffered a steep drop in chip prices, is expected to lose 1 billion deutschmarks this year.
The latest warning by the company follows the announcement last month that it was closing its £1.2 billion factory in North Tyneside in Britain with the loss of 1,100 jobs.
Other plants that could be affected are in France, Germany, Taiwan and the US.
The British closure prompted a political outcry. A similar move in Germany, where national elections are to take place next month, would be equally as sensitive.
However, the sharp drop in prices - which Siemens blames on oversupply and on undercutting by South Korean manufacturers - means it expects to lose DM1bn in semiconductors in the year to September. It made a profit in semiconductors last year of 109 million deutschmarks.
A spokesman said Siemens remained committed to the semiconductor business, although it was likely to make another loss in the next financial year.
