Toshiba's plan to build $8.9bn plant on track

Toshiba is world's second-largest Nand chip maker. (SUPPLIED)

Chip manufacturer Toshiba will spend ¥800 billion ($8.9bn, or Dh32.6bn) to build a new microchip plant, reviving plans that it had put on hold amid sluggish sales.

Japan's biggest chipmaker is likely to start construction of the new domestic factory for Nand flash memory chips as early as this summer, aiming to begin operations in spring 2011, the Nikkei said yesterday, prompted by a pick up in demand.

Toshiba is the world's second-largest Nand flash memory maker behind Samsung Electronics. Unlike dynamic random-access memory (Dram) chips, the standard memory used mainly in PCs, Nand flash memory can retain data after power is shut off, and is widely used in digital cameras, mobile phones and portable music players.

"Nand demand is set to grow stronger in the long term than Dram's. It is the right step to expand capacity to meet that growing demand," said Mizuho Investors Securities analyst Yuichi Ishida.

"Without investing in capacity now, it would be running the risk of falling further behind Samsung."

Samsung held a 39.3 percent share of the global Nand flash memory market in July-September, followed by Toshiba with 34.6 per cent and Hynix Semiconductor with 10 per cent, said research firm iSuppli.

Samsung, also the world's No1 Dram chip maker, plans more than 5.5 trillion won (Dh17.2billion) in capital spending for memory chips this year, and said it was seriously considering raising that investment.

 

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