Report: Toshiba to postpone flash-chip plant construction

Toshiba will delay by one year the construction of two chip plants in Japan as a result of the poor economy and low flash memory prices, NHK reported Tuesday.

Toshiba will delay by one year the construction of two chip plants in Japan as a result of the poor global economic conditions and continued low prices for flash memory chips, according to a Tuesday morning report by Japanese public broadcaster NHK.

The plants in Mie and Iwate prefectures in central Japan were due to be constructed this year, with production starting sometime in 2010.

Toshiba was not immediately available for comment.

Flash memory chips are used in numerous consumer electronics gadgets such as cell phones, digital cameras and portable music players, but as sales of those devices slow, so does demand for the chips.

The memory chip market has been in a rut for some time with oversupply from the world's chip makers forcing prices down to at or below the actual production cost. A 32GB flash chip currently costs around US$5.20 on the spot market, with 2GB memory cards as cheap as $3.08, according to data from DRAMeXchange.

Toshiba's announcement to construct the new plants was a statement of confidence in the market when it was made last year because it assumed prices would rise by 2010, at which point Toshiba would be able to profit from the new production. But the production glut continued throughout 2008, and with sales of devices like cell phones and digital cameras dropping, the prospects for the market remain weak.

Just before the end of last year Toshiba said it would cut flash-chip output by 30 percent from January at its Yokkaichi factory, which was one of the two slated for expansion. It also suspended production for an unusually long 13 days over the year-end period to help it adjust to lower demand.

Toshiba is scheduled to announce its financial results for the October-to-December quarter on Thursday, when analysts expect it to revise its financial outlook for the year.

Toshiba's forecast was revised in September, before the global economic crisis took hold, and calls for an operating profit of ¥150 billion (US$1.7 billion) on sales of ¥7.7 trillion. A recent newspaper report said Toshiba is likely to post an operating loss of more than ¥200 billion for the year to March.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags toshibaflash memory

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?