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Toshiba to increase chip production on cellphone demand

Toshiba Corp, Japan's biggest chipmaker, will speed up plans to increase production of flash chips by about six months to meet demand from mobile-phone makers. The stock headed for its highest close in almost seven years.

The chipmaker will process 60,000 wafers a month, compared with its original target of 35,000, at its fourth plant in Yokkaichi, central Japan, by the end of June next year, spokesman Keisuke Ohmori said today, confirming a Nikkei Shimbun business report.

This compared with a previous schedule for the quarter ending December next year, Ohmori said.

Toshiba, however, said it now expects to sell 1 million high-definition DVD players in North America by the end of this year, lowering its previous estimate of 1.8 million units.

Toshiba shares gained ?5, or 0.5 percent, to ?948. The company was the second most-actively traded stock by value, with ?63.4 billion (US$521 million) in shares changing hands.

The new schedule suggested that Toshiba, the world's second-largest flash-memory chipmaker, and Milpitas, California-based partner SanDisk Corp, believe demand for the chips used to store songs and video in music players, game consoles and digital cameras is picking up.

The Tokyo-based company fulfills only 60 percent to 70 percent of its orders for the chips, Ohmori said.

The flash-memory market "has stabilized since the spring, and that helped" Toshiba's stock, said Hideyuki Suzuki, an analyst at SBI Securities Co in Tokyo. "I wouldn't be surprised if the share price reaches ?1,000 in [the] short term."
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