NEC, Japan's biggest semiconductor maker, said it expects to post a group net loss of 20 billion yen ($151 million) in the six months to September -- its first loss in five years -- compared with a 35.7 billion yen profit in the same period a year earlier.

NEC managing director Shigeo Matsumoto said weak prices of computer memory chips known as dynamic random-access memories (DRAM) sparked a slide in the prices of other types of semiconductors, weighing on its earnings.

Economic woes at home have also made companies reluctant to spend money on telecommunications equipment and machinery, two areas of business which last year buoyed NEC's growth, he said.

``A delay in an economic recovery at home and in Asia had a profound impact on our business,''Matsumoto told a news conference.

NEC's stronghold, the electronics device division, will suffer an operating loss of 2.0 billion yen in the first half, compared with a 50 billion yen profit a year earlier, he said.

Matsumoto said NEC aims to return to profitability in the second half through restructuring steps, cuts in spending and a shift of emphasis to the lucrative business of systems integration.

Among the measures NEC announced are a cut in its work force by five per cent, or 6,000 employees, over the next three years through natural attrition, a reduction in research and development spending and a cut in the pay of executives on its board of directors by six to 10 per cent.

NEC also said it would consolidate its global memory chip assembly and packaging operations, moving operations in Malaysia to an existing facility in Singapore and those in Ireland to a plant in Britain.

NEC's loss warning follows those of Hitachi Ltd and Toshiba Corp

Hitachi expects a group net loss of 250 billion yenfor the current business year, while Toshiba expects profits to be nil.

NEC's Matsumoto said its troubled US PC making unit Packard-Bell NEC, which NEC brought fully within its own camp in July, dragged down NEC's half-year profit by 10 billion yen.

NEC injected $225 million in its latest round of financial support to Packard Bell, boosting its stake in the company to 52.81 per cent from 49 per cent.

NEC shares ended down seven yen at 884 yen on Friday, the lowest level since 1981, as investors grew concerned over poor business prospects at Packard-Bell NEC and weak chip prices. The earnings figures were released after the close of trading.

PB-NEC has been losing market share in the harshly competitive US market due to a delay in development of lower-priced models.

While NEC refrained from predicting its full-year earnings, Warburg Dillon Read analyst of Yoshiharu Izumi said he expects NEC's 1998-99 group operating profit to be about 155 billion yen, falling sharply short of the company's target of210 billion yen.