Toshiba to shut plants, outsource semiconductor production

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Toshiba, the world’s second largest maker of flash memory chips, is to shut one of its oldest plants in Yokkaichi (Japan) and outsource some semiconductor production in its effort to boost profitability. It will also phase out low-end chips used in products such as memory sticks and will start outsourcing production of logic chips next year, to cut costs.

The measures are part of Toshiba’s efforts to focus on its main business of making chips that save photos and songs in smartphones, including Apple’s iPhone.

Toshiba will outsource the production of next generation system LSI chips, by as early as the next fiscal year. System LSI chips’ functions range from processing images for television screens to processing data and will account for 30 per cent of the 1.2 trillion yen in sales Toshiba forecasts from its chip business this year, according to the company.

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