Toshiba Corp, the second-largest chipmaker, will tell 39 percent of workers at its semiconductor business to stay home for two to four days by the end of the year to cut costs and trim inventories.
The 12,000 employees include workers at chip plants in Mie, Hyogo and Ohita prefectures, spokesman Kenichi Sugiyama said.
The workers will receive 90 percent of their base wages, he said, confirming a report in the Nihon Keizai newspaper.
It will be the first furlough of chip division workers for Toshiba since 1974.
Toshiba joins NEC Corp. in telling workers to stay home at partial pay to reduce costs, a measure investors say doesn't solve the problem of slumping prices and an excess of chips.
The spot price of 128-megabit dynamic random-access memory chips has plummeted 81 percent to US$1.07 in the past 10 months.
"This is just a short-term remedy," said Sadaji Shibata, who helps manage US$66 billion in securities at Daiwa Asset Manage-ment Co, which holds Toshiba and NEC shares.
"Japan's chipmakers should get rid of their commodity chip plants," Shibata said.
Toshiba may be on course to take more drastic actions. The company may sell or close the business that makes DRAM, the main memory in personal computers, Sugiyama said, confirming a statement made by chairman Taizo Nishimuro to the Financial Times.
Toshiba expects to lose as much as US$1.24 billion at its DRAM division this fiscal year.
Nishimuro told Bloomberg News last month his company is in talks with Infineon Technologies AG, the fourth-biggest memory-chip maker, about a possible merger of their DRAM businesses.
Toshiba's shares fell 6.4 percent to ?467. The shares have declined 39 percent since the beginning of the year.
Japan's four biggest chipmakers are cutting thousands of jobs and idling plants after posting combined losses of ?439 billion (US$3.6 billion) in the six months to Sept. 30.
Toshiba, which expects a loss of ?200 billion this fiscal year amid plummeting chip prices, will save about ?120 million in wages and electricity bills, Sugiyama said.
In Tokyo, administrative, marketing and researcher and development staff will also be affected, he said. Sugiyama declined to say how much the furloughs will reduce production.
The Mie plant makes DRAM chips and other types of memory chips. The Ohita and Hyogo factories make semiconductors used in digital consumer products and communications equipment.
NEC last week said it will tell 6,600 workers at its chip plants in Japan to take several days off this month and next.
The workers will be paid 80 percent of their salaries.
Hitachi Ltd and Fujitsu Ltd, Japan's third- and fourth-biggest chipmakers after Toshiba and NEC, have no plans to furlough workers in their semiconductor businesses, Hitachi spokesman Kenichiro Mizoguchi and Fujitsu spokeswoman Chiaki Kuwahara said.
Toshiba employed about 30,000 workers at its chip business as of March 31.
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