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Sat, Dec 06, 2008 - Page 10 News List

Toshiba denies plans for a full output halt for flash chips during holidays

SUSPENSION: The world’s No. 2 producer confirmed a partial stoppage and forecast its lowest annual profit in four years amid slowing global demand for the chips

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Toshiba Corp, the world’s second-largest producer in the US$12 billion NAND flash memory market, denied a report it plans a complete halt of production of the chips during the holiday period.

“We are considering a partial stoppage, but there is no plan to completely halt” output, Toshiba spokeswoman Kaori Hiraki said by telephone yesterday.

Toshiba will “completely” suspend production at chip plants in Japan’s central Mie prefecture and southwestern Oita prefecture for nine days starting on Dec. 27, public broadcaster NHK reported on its Web site yesterday, without saying where it obtained the information.

The Tokyo-based firm operates its Yokkaichi flash facilities jointly with SanDisk Corp, its production and technology partner. Toshiba’s Oita facilities make chips for flat-panel televisions and Sony Corp’s PlayStation 3 game consoles.

The company expects to post its lowest annual profit in four years as a global recession dampens demand for flash chips used in products such as Apple Inc’s iPod music players and system LSI devices used in flat-panel televisions and game consoles. The company’s Yokkaichi factories supply about one-third of the world’s flash memory, JPMorgan Chase & Co said.

Toshiba in September forecast its chip business will report a ¥65 billion (US$703 million) loss this year, after an ¥89 billion profit a year earlier, as sales decline 8 percent to ¥1.28 trillion. Total net income will probably tumble 45 percent to ¥70 billion in the 12 months ending on March 31, it said at the time.

Prices of the benchmark NAND flash memory chip have fallen 70 percent this year after plummeting 63 percent last year, Taipei-based DRAMeXchange Technology Inc (集邦科技), operator of Asia’s biggest spot market for chips.

Toshiba and California-based SanDisk together had a 36 percent share of the global NAND flash market in the quarter ended Sept. 30, compared with 43 percent by market leader Samsung Electronics Co, according to a JPMorgan report dated Nov. 21.

Micron Technology Inc, which produces flash in a joint venture with Intel Corp, and Hynix Semiconductor Inc shared third place with 10 percent.

Closely held Renesas Technology Corp, Japan’s third-largest chipmaker, may extend its holiday output halt to as much as two weeks from eight to 10 days planned originally, spokesman Hirotaka Ohno said yesterday.

NEC Electronics Corp, Japan’s fourth-largest chipmaker, is considering stopping semiconductor operations for as much as 13 days over the New Year period, longer than last year because of weaker demand, spokesman Hisashi Saito said, without specifying the duration of the halt a year earlier.

Fujitsu Ltd may also halt factory operations longer than last year, spokesman Toshiyuki Fukuoka said, without giving further details.

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