The technology leader in high definition products and the world’s no. 2 manufacturer of NAND flash memory chips, Toshiba Corp., plans to outsource a part of the production of its next-generation 28-nanometer (nm) system chips.

According to industry sources, the chips will be used in a wide range of electronics such as game consoles, digital cameras, flat panel TVs and other electronic gadgets starting in April 2010. To meet demand by that period, Toshiba will have to ramp up production. Its customers include IT giants like Apple (AAPL), which has already purchased $500 million worth flash memory chips from Toshiba.

Toshiba currently manufactures chips at its plant in Oita, southern Japan and plans to outsource to expand its production if capacity is insufficient.

According to sources, Toshiba is holding discussion with Singapore’s Chartered Semiconductor Manufacturing Ltd. (CHRT) and Advanced Micro Devices (AMD) to spin off Globalfoundries Inc. and proceed with its outsourcing plan. This will help the company to reduce costs and fulfill customer supply orders.

Last year, Toshiba formed a joint venture with Sony (SNE) and SCEI (Toshiba owned 60% while Sony and SCEI owned 20% each) for the production of high-performance semiconductors, which include the Cell/B.E. processor, the RSX graphics engine and SoCs (System-on-Chip) for applications in digital consumer products. Moreover, to ramp up chip production, it bought Sony’s SoC line for about 90 billion yen ($968 million).

Toshiba competes with International Business Machines (IBM), which has technology alliances with Chartered Semiconductor, Globalfoundries, Infineon Technologies, Samsung Electronics, NEC Electronics and STMicroelectronics (STM) for developing 28 nm chips. In addition, NVIDIA (NVDA) plans to boost its 40nm technology, that is likely to improve margins and help the company take market share from Toshiba.

Toshiba is looking to bid for French nuclear group Areva’s power transmission and distribution unit. This new line will help the company enter into a new line of power business for stable revenue and growth that will facilitate cost reduction at its loss-making chip division that has been under pressure due to economic recession.

Shares of Toshiba were up 3.2% to 481 yen outperforming a 1% rise in the benchmark Nikkei average.

Zacks Investment Research
View original at: Zacks.com News Feed

1. (AAPL) The Smartphone BattleAs per consumer perception, Apple Inc.’s (AAPL) iPhone and Research In Motion’s (RIMM) BlackBerry are...
2. (GOOG) Google Browser Ships in Sony ComputersGoogle (GOOG) recently struck a deal with Sony Corp. (SNE), according to which the latter will ship...
3. (AAPL) ITC Investigates NAND ChipmakersAn investigation has been launched by U.S. International Trade Commission, on several NAND flash memory...
4. (AAPL) Why You Need to Buy Apple and Sell Palm Shortby David Fessler, Advisory Panelist Regular readers, my colleagues and just about everyone else I...
5. (AAPL) This Stock Gave Investors 5,460% & It’s About to Do It Againby David Fessler, Advisory Panelist Editor’s Note: Correction, AAPL did not have a 57,000% return....
6. (INTC) Bet on the Chip Leaders… IntelThere is a maxim which states companies that spend more on development and advertising during...

Search Posts by Tag: AAPL | Advanced Micro Devices Inc. | AMD | Apple Inc. | Chartered Semiconductor Manufacturing | CHRT | IBM | International Business Machine | NVDA | NVIDIA Corporation | SNE | Sony Corp. | STM | STMicroelectronics NV | Personal Computers | Technology

RSS Feeds by Tag: AAPL | Advanced Micro Devices Inc. | AMD | Apple Inc. | Chartered Semiconductor Manufacturing | CHRT | IBM | International Business Machine | NVDA | NVIDIA Corporation | SNE | Sony Corp. | STM | STMicroelectronics NV | Personal Computers | Technology |

Other Posts by: vitalstocks | RSS Feed for this author