Toshiba to Close Some Japan Chip Plants

Toshiba plans to shutter some assembly plants for system and discrete chips in Japan and instead expand output in Thailand and Malaysia and  from outside suppliers, a newspaper said.

Toshiba, facing the worst-ever global slump in the chip industry, aims to slash production costs through the changes as it is likely to plunge into an annual operating loss of more than 200 billion yen ($2.3 billion) due to its struggling semiconductor operations, the Asahi daily said.

Toshiba spokeswoman Hiroko Mochida said the company is looking into moving more assembly overseas and other ways to improve efficiency, but nothing concrete had been decided.

Toshiba shares fell 1.6 percent to 370 yen, against a 1.3 percent decline in the Nikkei 225 Average .

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An executive at Toshiba, the world's No. 2 maker of NAND flash memory, said in December that it was considering allocating system chip assembly operations to overseas plants to ride out the downturn, and it would need to review its weak LCD driver and micro-controller operations.

Toshiba has about 10 domestic chip assembly plants, the Asahi said.

The chip industry's woes have been triggered by a chronic oversupply and falling prices as the global financial crisis cuts demand for chips in electronics products and automobiles.

Copyright 2009 Reuters. Click for restrictions.