Toshiba to close chip plants as demand slides

Toshiba Corp. said Wednesday that it would be three of its six discrete narrow chip facilities in Japan and trim exports of certain types of chips at the end of the year, as demand for PCs and TVs slide in Europe and USA. Discrete chips are relatively simple semiconductors used in a wide range of electronic products, audio-visual equipment to cars and mobile phones. The three facilities are scheduled to be closed in the first half of fiscal year begins in April 2012 in an effort to cut costs, Japanese makers declining because of the strength of the yen.

"That's because demand is so weak," says analyst Yoshiharu Izumi at JP Morgan in Tokyo, adding that the announcement would probably slightly negative for shares in the company. "There is the high yen, cuts in domestic Setmaker, especially Sony and Panasonic, and PC sales were weak across the world." He said that Toshiba heavily on Finnish maker Nokia is struggling to sell its mobile phone chips. Toyota said in a statement, will temporarily produce analog chips and image sensors stop its Oita plant, discrete chips in its Himeji factory, and photonic chips in her Kita Kyushu plant - all in western Japan - from late December to early in January. Cuts in production rate starts in late November, the company said. Shares in Toshiba fell 1.1 percent to more than 347 yen Wednesday, underperforming the Nikkei average.