Toshiba goes slow on NAND output

BANGALORE, INDIA: With the marketplace still facing the glut of chips, Toshiba Corp is going slow on plans to boost production of NAND flash memory. The decision comes close on the heels of the company welcoming a new president at the helm.

The Japanese giant is feared as heading for a second straight net loss in the year to March 2010.

Industry analysts have said that the company is awaiting demand for electronics to pick up before deciding on whether to restart stalled plans to build two NAND plants. President Norio Sasaki pointed out that "if we say we are raising capacity, others will do the same... When we all act out of suspicion and do not read (the market) well, it yields excess output," a report said. The company, which is also Japan's largest chip maker, has been in the process of shifting focus to its stable power business while reing spend on its loss-making semiconductor business. Significantly, the semiconductor business has turned costly for the company after it had eroded its capital and forced it to raise $5 billion earlier this year.

With annual chip prices plummeting by more than 70 per cent, Toshiba has found itself in a tight spot having forced to put off construction of two NAND flash memory plants it had planned. It is now expected that Toshiba might wait and watch the market before it finally gives the go ahead for building the plants. The decision might as well depend on its June chip sales before Toshiba final goes in for the plants.