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Toshiba slashes DRAM output

Chip giant blinks

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Toshiba is to slash DRAM production at its Yokkaichi plant in Japan by 60 per cent due to oversupply and flagging demand.

The Japanese manufacturer said today it would close one of its production lines at the plant at the end of next month.

Most of the 300 staff hit by the move will be transferred to another production line at the same facility.

The Yokkaichi plant currently churns out 11.5 million chips per month, and this will be reduced to 4.5 million chips from the start of October.

This will cut Toshiba's total monthly DRAM production from 27 million units to 20 million units.

The company said the global downturn was making itself "strongly felt" in the semiconductor market, where weakening demand for mobile phones and PCs was creating oversupply.

Unlike previous downturns in the memory market, DRAM makers have shown great reluctance in cutting production this time around. Individual companies are reluctant to make the first moves, for fear of giving up market share permanently to their rivals. But the price squeeze, which has seen the overall value of the DRAM market collapse in half this year, is at last exerting its toll.

Hynix, the Korean semiconductor giant and - financially - the most vulnerable player has already cut back on production. And last month Toshiba rival NEC it aimed to shut its chip plants in Scotland and California by March and exit the DRAM market within three years.

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