Toshiba strikes chip deals with Samsung and Sony

By on December 24, 2010, 5:02 PM
Toshiba, the world's third biggest chip maker behind Intel and Samsung, is planning on outsourcing output of some system chips to Samsung Electronics and selling a production line to Sony. The company wants to reduce its non-memory chip exposure by restructuring its chip operations after the business lost the company billions of dollars during the global financial crisis two years ago. At the same time, Toshiba wants to build a new domestic factory to make LCD panels with total investment likely to be over 100 billion yen ($1.21 billion), according to Reuters.

In the next financial year, which starts in April, Toshiba will design cutting-edge system chips but will outsource production to Samsung and possibly other companies. This will free up resources for other projects (like memory modules) by eliminating the need for capacity upgrades, which could actually benefit Toshiba in the long run. Toshiba is the world's second biggest supplier of NAND flash memory; Samsung is first.

The company will also sell its system chip production line in the Nagasaki prefecture to Sony. The line produces chips used in the PlayStation console and is housed in a factory owned by Sony, so the transition should be a smooth one. An industry source has estimated the deal at 50 billion yen ($603.05 million). Sony originally sold the facility to Toshiba for 90 billion yen in 2008.





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