Amid pricing pressure and rising investment costs in 2010, Toshiba announced that it will outsource its semiconductor business to rival Samsung Electronics next year.
Japanese-based Toshiba is currently restructuring its chip-related operations and made the decision to outsource to South Korea’s Samsung earlier this week.
Toshiba well sell a semiconductor plant to Toshiba. Even though Toshiba will still manufacture the large scale integration (LSI) chips that are generally apart of the semiconductor business, it’s clear that Toshiba will concentrate its resources elsewhere.
One area where Toshiba feels it can stay competitive is in the memory chip business. The demand for memory chips has surged because of its use in smart phones. Toshiba also plans to build a factory to produce liquid crystal panels for Apple’s iPhones.
The sale of the LSI chip business to Samsung was a necessary action for Toshiba Sony as company officials said that it will accelerate decision-making and optimize the use of management resources. That’s corporate speak for “We lost money this year and need to find new and more efficient ways to run our business.”
Toshiba has said that it wants to reorganize its business into two divisions—one for cutting-edge digital home appliances and the other for a more diverse range of products. Although Toshiba kept the description of its reorganized businesses fairly vague, it’s clear that the company no longer wants to compete head-to-head with Intel in the production of LSI chips.
LSI chips combine a microprocessor and other specialized circuitry and are the brains of many consumer-electronic devices
Both Toshiba and Samsung denied commenting on the value of the transaction and the change will go into effect on January 1.
For more SCD news, check out this huge air freight merger that will redefine freight forwarding in 2011 and how UPS was crowned the eco-friendly champions of the shipping sector.
Japanese-based Toshiba is currently restructuring its chip-related operations and made the decision to outsource to South Korea’s Samsung earlier this week.
Toshiba well sell a semiconductor plant to Toshiba. Even though Toshiba will still manufacture the large scale integration (LSI) chips that are generally apart of the semiconductor business, it’s clear that Toshiba will concentrate its resources elsewhere.
One area where Toshiba feels it can stay competitive is in the memory chip business. The demand for memory chips has surged because of its use in smart phones. Toshiba also plans to build a factory to produce liquid crystal panels for Apple’s iPhones.
The sale of the LSI chip business to Samsung was a necessary action for Toshiba Sony as company officials said that it will accelerate decision-making and optimize the use of management resources. That’s corporate speak for “We lost money this year and need to find new and more efficient ways to run our business.”
Toshiba has said that it wants to reorganize its business into two divisions—one for cutting-edge digital home appliances and the other for a more diverse range of products. Although Toshiba kept the description of its reorganized businesses fairly vague, it’s clear that the company no longer wants to compete head-to-head with Intel in the production of LSI chips.
LSI chips combine a microprocessor and other specialized circuitry and are the brains of many consumer-electronic devices
Both Toshiba and Samsung denied commenting on the value of the transaction and the change will go into effect on January 1.
For more SCD news, check out this huge air freight merger that will redefine freight forwarding in 2011 and how UPS was crowned the eco-friendly champions of the shipping sector.
