JAPANESE ELECTRONICS FIRM Toshiba is closing down three of its six chip factories in Japan as it looks to slash costs.
The reorganisation will concentrate the front and back-end production processes of six discrete semiconductor facilities into three major facilities: Hijimeji Operations-Semiconductor (Ibo-gun, Hyogo prefecture); Kaga Toshiba Electronics Corporation (Nomi, Ishikawa prefecture); and Buzen Toshiba Electronics Corporation (Buzen, Fukuoka prefecture).
Toshiba is also cutting production at some of its semiconductor facilities from late November 2011 to early January 2012 due to "economic slowdown and fall in demand for consumer products, most notably for PCs and TVs in Europe and the US".
Meanwhile, the company said Buzen Toshiba will assume the new function of "development centre for assembly and packaging technologies for optical semiconductors". It will increase consignment to overseas pursuing cost competitiveness, and its production will be limited to focused products.
Toshiba said it has been implementing a series of measures to "restructure and strengthen its discrete and analog and imaging IC businesses", including accelerating the transfer of assembly and test operations to overseas facilities, outsourcing, shifting to larger diameter wafer production lines and halving its product line-up.
The firm said that employees at the affected facilities will, "in principle", be redeployed within Toshiba Group.
The news comes at a difficult time for chip makers. Earlier this month, we wrote that Infineon has cut its sales forecast for its fiscal year 2012, claiming that customers are holding off on ordering from the firm.
Like all chip makers Infineon has been struggling with sluggish demand in the semiconductor industry during 2011. But when the firm forecasted that its fiscal 2012 sales will decline by a "mid-single-digit percentage", it was confirmation that things won't be getting better for the chip industry any time soon. µ