Toshiba to Close Chip Plants, Shift Workers as Yen Cuts Competitiveness

Toshiba Corp. (6502) will shut three semiconductor factories in Japan and transfer about 1,700 workers by the end of September 2012 to boost competitiveness eroded by a stronger yen.

The industrial group will consolidate single-function chip production into three domestic factories after the closures, Toshiba said in a statement today. It plans to relocate 1,200 of the workers to group companies, and another 500 employees will be moved under plans to halve output of 150-millimeter wafers at one factory, spokesman Keisuke Ohmori said.

Toshiba is reorganizing production of less-profitable discrete semiconductors, which are used for single functions such as transistors, as a rising yen and slowing global economy sap demand for consumer electronics. The Tokyo-based maker of computers, nuclear reactors, televisions and home appliances said it plans to cut output of discrete chips and system LSI chips in Japan until the beginning of January.

The company plans to book charges for the closures next fiscal year and has yet to determine the amount, Ohmori said.

Toshiba fell 1.1 percent to 347 yen at the close of trading in Tokyo today.

The yen, which reached a post-World War II record last month, has gained more than 9.6 percent in the past six months, the best performance among 10 developed-nation peers tracked by Bloomberg Correlation-Weighted Currency Indexes.

The currency’s advance hurts the overseas competitiveness of Japanese manufacturers and reduces the value of repatriated earnings.

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To contact the editor responsible for this story: Michael Tighe at

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