Nikon to scale back stepper ops in restructuring

TOKYO, May 26 (Reuters) - Japanese precision equipment maker Nikon Corp (7731.T) said on Tuesday it would restructure its loss-making stepper business at home and abroad, cutting 1,000 jobs and putting its chase for new growth on hold as revenue shrinks.

Nikon, the world's No.2 maker of chip steppers -- which scan circuitry onto silicon wafers to make chips -- said it would streamline marketing and service units in the United States and Europe, where sector leader ASML (ASML.AS) has been gaining market share.

Stepper maintenance services in Singapore, where rival Canon (7751.T) has a solid client base, would also be cut, and it would merge four manufacturing subsidiaries in Japan into two, to save a total 8 billion yen ($84.5 million) in fixed costs.

Nikon, which projects a 33 billion yen loss in its stepper business this financial year, said it was trimming its overseas service operations to better match the location of its existing customers.

Demand for steppers has shrivelled up as the economic downturn hurts final demand for electronics and chip makers' appetite for new investment.

Nikon, which also makes digital single reflex cameras and compact cameras, has forecast an annual net loss of 17 billion yen this year, compared with a profit of 28.1 billion yen for the year just ended.

Prior to the announcement, shares at Nikon fell 1.1 percent to 1349 yen, in line with a 1 percent decline in Tokyo's electrical machinery index .IELEC.T. ($1=94.70 Yen) (Reporting by Mayumi Negishi; editing by Simon Jessop)