Leading chip makers are reopening plants mothballed in last year's sector slump to cope with a revival in global demand.

Hitachi, Japan's sector leader, is reopening a production line, formerly used to make mobile phone SIM cards, to manufacture liquid crystal displays.

And second-ranking Toshiba has cranked up operations at a plant which had been operating at half capacity.

Sharp, also Japan-based, has brought forward to July the opening of a new plant in Hiroshima prefecture, 300 kilometres south west of Tokyo.

Turnaround

The moves follow a revival in demand for electronic component from a slump blamed last year mainly on the global economic slowdown.

Weak demand for new computers by companies, which had updated stock in the run up to 2000 over Millennium Bug fears, exacerbated the downturn.

But the economic revival, and the start of a new cycle of corporate computer investment have helped revive the market.

Both NEC and Fujitsu said on Thursday that they were operating at full capacity.

"Demand rebounded over the first three months of this year," Fujitsu spokesman Kazataka Saito said.

NEC, like Hitachi, noted strong demand for liquid crystal displays.

A World Semiconductor Trade Statistics report on Tuesday said that demand for semiconductors, which slid by almost one third last year, would grow by 2.3% in 2002.

Strong markets

Toshiba spokeswoman Midori Suzuki said: " We aim to increase production judging by the recovery in demand. Last year, demand really went down."

And Sharp's Yukasu Uno said: "The worldwide market for flash memory chips is getting better compared with last year."

The decision to open the firm's new factory early had been prompted largely by growing demand for the laser units used in DVD players.