Toshiba to Slash Memory Chip Output Due to Supply Glut

Dec. 16, 2008
Production will be cut by 30%

Toshiba Corp. said on Dec. 16 that it was slashing its production of NAND flash memory chips -- used in iPods and other digital music players -- by 30% as the economic crisis hits demand.

As well as the cutbacks at its flash memory plant in central Mie Prefecture from January, Toshiba will suspend operations at its other main semiconductor factories for up to 25 days in response to a supply glut.

"Recession in the global economy and the slowdown in consumer spending are having a significant impact on demand for semiconductors," the company said. "This is particularly notable in NAND flash memories, where decreased demand for applications such as memory cards and MP3 players has generated excess supply," it added.

Toshiba is a leading manufacturer of the NAND flash memory chips and it has invested heavily in recent years to expand production to meet brisk demand.

But the group, whose interests span electronics and nuclear energy, lost 26.85 billion yen (US$297 million) in the fiscal second quarter due to falling chip prices and a stronger yen.

Toshiba plans to lay off 160 temporary workers at a factory in the southern island of Kyushu, the Nikkei business daily reported Tuesday.

Copyright Agence France-Presse, 2008

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