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Toshiba pumps $2.9B into chip lines
By Alex Frew McMillan
TOKYO, Japan (CNN) -- Toshiba Corp. said it will spend 350 billion yen ($2.9 billion) to build chip production facilities using 300-millimeter wafers at two plants. Tokyo-based Toshiba, the world's second-largest chipmaker after Intel, will start the four-year construction project in the fiscal year starting next March. It will install the new production lines at its chip operations at Oita, in the prefecture of the same name on the southern island of Kyushu, and at Yokkaichi, near Nagoya in Aichi prefecture. "These new facilities will allow us to deploy industry-leading process technology that will reinforce our leadership in key growth markets," Takeshi Nakagawa, CEO of Toshiba's semiconductor division, said in a statement. Clawing back from record lossToshiba is trying to reclaim its position as the Asian chip industry's leader, as it loses business to competitors such as South Korea-based Samsung Electronics. Toshiba in April posted a record net loss of 254 billion yen ($2.11 billion) for last business year. (Full story) It expects to turn a narrow profit this year. The 300-millimeter wafers that Toshiba is installing cut production costs by as much as 30 percent over the standard 200-millimeter wafer. Elpida Memory Inc., the chip joint venture of NEC Corp. and Hitachi Ltd., plans to spend 70 billion yen ($580 million) next year to expand a 300-millimeter plant due to start production next month. Stock slipping after announcementAnalysts had expected Toshiba's announcement of the new production lines, though they had anticipated costs closer to 400 billion yen. Construction on the new facilities at the Oita plant will start in fiscal 2003, with the new line slated to start production in fiscal 2004. Construction on the Yokkaichi operations is set to start in fiscal 2006. Toshiba shares are down 2.46 percent at 357 yen on Monday morning, contributing to a 0.81 percent slide in the Nikkei average. The announcement came after the close of trade Friday, when Toshiba shares fell 3.68 percent.
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