Wednesday, July 28, 2021

Toshiba to Cut Flash Chip Output

TOKYO (Reuters) – Toshiba Corp, the world’s No. 2 maker of NAND flash memory, will halt chip production at two plants for nine days due to weak demand, in its first output break in seven years, broadcaster NHK reported on Friday.

Toshiba shares rose nearly 3 percent after the report, but company spokeswoman Hiroko Mochida denied that it planned to temporarily shut down all operations at the factories in Yokkaichi, in western Japan, and Oita, in southern Japan.

However, she said Toshiba was looking at its operating schedule for the year-end and considering suspending some chip-making lines, adding that this would not be a rare move.

Toshiba on Wednesday said that it would speed up restructuring to cut costs at its loss-making chip operations, faced with faster-than-expected price falls since October and weakening economies around the world.

The NHK report said Toshiba, which competes with Samsung Electronics and Hynix Semiconductor, will halt output at the two plants between December 27 and January 4, the first semiconductor plant shutdown since 2001.

Toshiba made the decision after the global financial crisis and economic downturn dampened demand for gadgets such as digital cameras, Apple Inc’s iPod and mobile phones that use Toshiba’s flash memory, NHK said.

Goldman Sachs analyst Ikuo Matsuhashi said the output stop did not change the brokerage’s view that Toshiba would make an operating profit of 70 billion yen ($759 million) or less in the year to March 2009 — less than half of Toshiba’s profit estimate of 150 billion yen.

“Such a move should help prevent Toshiba’s inventories from increasing, but not enough to change our view on Toshiba,” he said in his report to clients, adding that other companies will likely follow suit.

Slumping demand and excess capacity have caused semiconductor prices to plunge, pushing Toshiba’s chip business to a 59.5 billion yen ($645 million) operating loss for the April-September period.

The Yokkaichi factory, partly run with production partner SanDisk, is Toshiba’s memory factory with the capacity to make 290,000 300 millimeter-wafers per month.

The Oita plant is the company’s main system chip production site, with the capacity to make 11,000 wafers a month.

Toshiba shares gained 2.7 percent to 307 yen by midday, against a 0.7 percent rise in the benchmark Nikkei average.N225.

(Reporting by Sachi Izumi; Editing by Sophie Hardach)

Copyright 2008 Reuters. Click for restrictions.

Similar articles

Latest Articles

Data Science Market Trends...

When famed mathematician John W. Tukey postulated that advanced computing would have a profound effect on data analysis, he probably didn’t imagine the full...

Data Recovery Market Trends...

Data recovery is more important than ever in this era of constant cyber attacks and ransomware. The Verizon Data Breach Investigations Report (DBIR) looked...

Trends in Data Visualization

In a world of big data, visualization is becoming a key skill set that every business must master.  Digital technology has transformed the way businesses...

Microsoft Data Portfolio Review

With a host of analytics services for almost any situation, Microsoft Azure’s data services have got just about every base covered.   In the world...