Toshiba to slash flash memory production as demand drops

Toshiba is planning to cut production of flash memory chips by just under one-third at its semiconductor base in Japan as demand for the chips drops.

Flash memory chips are used in numerous consumer electronics gadgets such as cell phones, digital cameras and portable music players, but as sales of those devices slow so does demand for the chips.

From January, Toshiba will reduce output at the plant by 30 per cent, it said Tuesday.

The cut will be preceded by a total shutdown of operations at the factory in Yokkaichi, in central Japan, over the new year break.

Chip plants typically remain in operation 24 hours a day but manufacturers usually idle plants for anything from a handful of days to a week during holiday periods to give their workers some time off. The only exceptions are during periods of heavy demand and rising prices, when the factories continue operations, and during slumps, when the break is usually extended.

With demand for the chips falling, the latter applies this year. Toshiba will shut its two most modern productions lines, which use 300-millimeter wafers, for 13 days from Dec. 31 to Jan. 13 while two older lines that use 200-millimeters wafers and produce less chips, will be idled for four days.

Additionally Toshiba said it plans to halt production on lines at its Oita factory, which makes system LSI chips and image sensors, for between two and 22 days. Production of system LSI chips and analog ICs will stop for 25 days at its Kitakyushu plant and its Himeji factory, which makes power and signal ICs, will be halted for 18 days.

The breaks are some of the longest in recent memory for Toshiba and point to the size of the drop in demand that the company is witnessing.

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