Global Sources
EE Times-India
Stay in touch with EE Times India
EE Times-India > Manufacturing/Packaging

Toshiba on a cost cutting campaign

Posted: 12 Jan 2011     Print Version  Bookmark and Share

Keywords:Toshiba  financial report  manufacturing 

2008 was a challenging year for Japan's Toshiba Corp. in terms of its HD DVD losses and downturn in the NAND flash market. Also its digital products such as disc drives, cell phones and TVs were not doing well and its nuclear power business had failed to pick up.

This year, although sales are expected to remain somewhat flat, the company expects to narrow its loss for fiscal 2010, and to move into the black in fiscal 2011. Implementing an aggressive cost-cutting campaign, the company also is seeing its various businesses—such as NAND, LCDs and nuclear plants—back on track.

Toshiba sells semiconductors, industrial power systems, LCD TVs, notebook PCs, and small LCDs. Minor products are home appliances, medical systems, other digital products, and a host of industrial-related products.

Toshiba lost about Rs.18,805.13 crore ($4.1 billion) on sales of about Rs.3.66 lakh crore ($79.9 billion) in fiscal 2009. Toshiba is projected to lose Rs.1,100.79 crore ($240 million) on sales estimated at Rs.3.51 lakh crore ($76.6 billion) in fiscal 2010, which ends March 30, 2011. Toshiba is projected to make Rs.3,852.76 crore ($840 million) on sales of Rs.3.85 lakh crore ($84 billion) in fiscal 2011, according to MF Global Co.

''Toshiba reduced fixed costs by Rs.23,391.75 crore ($5.1 billion) last year mainly in its LCD and chip businesses, including the shutdown of several LCD and non-memory chip plants, as well as a shift in production offshore,'' said David Rubenstein, an analyst with MF Global, in a report.

As reported, Toshiba has cut its IC-assembly capacity. And its logic IC unit is going fab lite. The company's so-called Logic LSI Division will expand its outsourcing of cutting-edge products, including 40nm chips, to multiple foundries from fiscal year 2011, according to Toshiba.

As part of the strategy for transforming its system LSI business and ''securing an asset light business model,'' Toshiba recently signed a memorandum of understanding with Sony Corp., expressing the intent to dissolve Nagasaki Semiconductor Manufacturing Corp. (NSM) and to transfer 300mm wafer fabrication lines there from Toshiba to Sony.

For now, NAND is the shining star at Toshiba. ''NAND flash memory tailwinds in smart phones and tablets should enable Toshiba to exceed earnings expectations in our view,'' Rubenstein said. Toshiba has over 30 per cent global market share in NAND flash.

''We estimate that NAND as a percentage of total OP will rise to 43 per cent in FY3/11 from 29 per cent in FY3/010 and large losses in FY3/09. The rise in profits should continue next year in our view, given that NAND demand is robust and supply is rather limited,'' he said.

1 • 2 Next Page Last Page

Comment on "Toshiba on a cost cutting campaign"
*  You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.


Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

Back to Top