Toshiba boss says it's too early to talk about chip foundry

Toshiba Corp chairman Tadashi Okamura said it's "too early" to discuss starting a made-to-order semiconductor factory in Japan.

Last week, Hitachi Ltd said it's in talks to set up a plant by 2007 with Toshiba, Japan's second-biggest chipmaker, and other electronics companies. Toshiba's spokesman Keisuke Ohmori declined to comment at that time.

"This topic needs to be considered from various angles, but overall, it's still too early for such discussions," Okamura told reporters after a news conference in Tokyo yesterday.

"Semiconductor companies have their own individual strategic issues, so just putting them together is not necessarily a good thing," he said.

Japanese chipmakers have been losing market share to Asian rivals because they have been unable to compete on costs. A foundry, which makes customized chips for electronics such as mobile phones and DVD players, would compete with Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電), the world's two largest suppliers of made-to-order chips.

A think-tank affiliated with Japan's Ministry of Economy, Trade and Industry in March proposed setting up a foundry in the country by 2007, which would need investment of US$3 billion.

Sales of the customized chips will have to reach at least US$5 billion to recoup the spending, the Japan Society for Promotion of Machine Industry said in its paper.

The Nihon Keizai newspaper reported last week that the Hitachi venture will spend as much as ?300 billion (US$2.7 billion) to build a factory by 2007.