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Toshiba outsourcing semiconductor production to rival Samsung

Darren Murph
December 25, 2010
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'Tis the season for manufacturing deals? Sure seems it. Merely hours after Sony announced its intentions to buy back Cell chip fabrication facilities from Toshiba, it looks as if Tosh is about to enter into yet another agreement. In this case, it'll be outsourcing the unprofitable production of semiconductors to rival Samsung, which will be responsible for churning out the brains behind a number of smartphones, televisions and digital home appliances. Numerous sources have explained that Toshiba is interested in realigning its focus onto the blossoming memory chip business, and moreover, its hoping to evade costly facility upgrades that would be necessary to remain competitive in the system LSI business.

In other words, the company is dodging investment costs and placing a greater emphasis on a sector that's already profitable (NAND flash production, for those curious), and after the Oita plant is handed off, it'll be used to make image sensors in digital cameras. The Nagasaki plant, as we heard earlier, will be handed over to Sony. Toshiba's stocks were sent northward after investors welcomed the news, but of course it remains to be seen what kind of consumer impact this will have. Whatever the case, we certainly hope Toshiba never runs into any trouble with Sammy -- it's not like its top brass can be touched, regardless of infraction.



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