Toshiba To Close Three Chip Plants After Weak Sales in U.S., Europe


Toshiba said Wednesday it will close three of its six Japanese manufacturing facilities and consolidate its discrete, analog and imaging IC production into the three remaining plants. The cuts are in response to falling demand for Toshiba consumer products, namely PCs and TVs, in Europe and the U.S.

As a more immediate measure to offshoot sluggish demand, Toshiba announced it will also be phasing out production of its power and optical semiconductors starting in late November and continuing through early January 2012. Production will be halted up to two weeks at its Oita, Himeji, and Kitakyushu plants during this timeframe. Toshiba said these temporary holds on production will provide the firm with the flexibility it needs to better respond to falling demand in its Western markets.

"The company will monitor the market and demand to make optimum decisions on its operations and production levels after the turn of the year," Toshiba said in a statement.

Keisuke Omori, spokesperson for Toshiba, said that there are approximately 1,200 workers within the three production facilities being shut down. "After the closure, they will be basically relocated within the Toshiba Group of companies, but no specific details are available at this time," he told CRN.

Toshiba pulling the reins on its production perhaps comes as no surprise. The semiconductor industry as a whole has taken a hit this year, with analysts such as IHS iSuppli anticipating similarly meager fourth quarter sales.

IHS iSuppli recently announced it reduced its global semiconductor revenue forecast for 2011 from 2.9 percent growth to just 1.2 percent. If the analysts’ predictions prove true, a 2011 year-over-year revenue growth of 1.2 percent would mean a pretty hefty fall from the 32.4 percent growth the market saw in 2010.

While IHS anticipates a slightly more optimistic growth rate of 3.2 percent in 2012, a full return to stronger semiconductor revenue growth is not expected until at least 2013.