Toshiba to shut chip plants in Japan

Toshiba is set to close three chip fabrication plants due to falling demand for its TVs and PCs in Europe and the USA. The 1,700-strong work force will be transferred to other facilities.

The shutdowns won't take place until the first half of the fiscal year beginning April 2012, but will be part of several moves the company is making in order to cut production costs across the board. News agency Reuters reports that in addition to a drop in overseas demand, the high value of the yen has led to a decline in exports. Business Week states that the Japanese currency's value has reached a post-World War II high, climbing 9.6 per cent in the last six months alone.

As well as the closure of the three plants, production will be scaled back, with plants in Oita, Himeji and Kita Kyushu - which focus on image sensors, discrete chips and photonic chips, respectively - temporarily closing between the end of December and the beginning of January.

All of this is part of a move to cut the manufacture of discrete semiconductors, with production of the hardware expected to be consolidated into three facilities once the closures and employee moves are complete.

Elsewhere in the PC industry, hard drive stocks have been dwindling due to recent flooding in Thailand, which has caused massive disruption to production of the storage drives, leading to price hikes. This is expected to continue well into 2012 due to the severity of the damage done to manufacturing facilities in the country.