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Thursday, May 11, 2006
Toshiba to Massively Invest in Chip Output

Japanese electronics maker Toshiba unveiled a plan to invest 2.04 trillion yen (18 billion dollars) over three years to boost output of computer chips and other products.

The planned investment is almost double that of the preceding three years and aims to meet growing demand for flash memory chips for devices such as digital cameras and portable music players.

Under the plan, Toshiba will construct new production lines of flash memory chips at its plant in Yokkaichi, western Japan. The company is also considering building another semiconductor plant in its home market.

Toshiba said it would raise its research and development spending to 1.26 trillion yen in the same period, up 200 billion yen from the previous three years.

Of the total 47 percent will be used for the development of next generation chips and other electronics devices, said Nishida.

With the investment, Toshiba, the second-largest player in the global market for flash memory chips, appears to be aiming to catch up with industry leader Samsung.

Toshiba, which is also a key manufacturer of nuclear power facilities, said it would spend more than 300 billion yen to complete the planned purchase of Westinghouse Electric Co.

Toshiba said last month its net profit for the year to March 2006 jumped 70 percent from a year earlier to 78.19 billion yen on sales which grew 8.7 percent to 6.34 trillion yen.

For the current year to March 2007, Toshiba expects net profit to surge to 90 billion yen on estimated sales of 6.6 trillion yen.

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