Toshiba Corp. has announced plans to considerably reorganize its semiconductor manufacturing business in order to boost profitability. At present the company executing a thorough review of its business model to achieve fab-less and fab-lite models, e.g., to start outsourcing production to third parties instead of in-house and cease building new fabs or design process technology.

Toward accelerating decision-making speed and optimizing use of management resources, the division will be reorganized into two: the Logic LSI division, responsible for SoC (system-on-chip) fabricated on 300mm wafer fabrication lines; and the Analog and Imaging IC division, which supplies key components for a wide range of products.

The Logic LSI division will promote a flexible manufacturing strategy responsive to demand volatility by combining use of its own production line with outsourcing. The division will expand outsourcing of cutting-edge products, including 40nm products, to multiple foundries from fiscal year 2011. By consolidating production on 300mm wafers at Oita Operations, the division will increase management efficiency and will also be able to channel more resources to its development and design sections.

The Analog and Imaging IC division will concentrate on analog ICs and imaging ICs, particularly CMOS image sensors, and use existing production lines at Oita Operations, including 300mm wafer lines, and Iwate Toshiba Electronics. The main focus will be general-purpose products, allowing the division to streamline its production lines. This approach is expected to support business expansion and to enhance profitability.

Since the 2008 financial crisis, Toshiba's system LSI business has promoted strategic allocation of resources under the Toshiba Group action programs to improve profitability announced in January 2009. The main focus has been on promoting analog ICs, CMOS image sensors and digital SoCs, discontinuing unprofitable products, and restructuring the back-end process through consolidation and increasing overseas production ratio.

As part of the strategy for transforming the system LSI business and securing an asset light business model, Toshiba has signed a memorandum of understanding with Sony Corp., expressing the intent to dissolve Nagasaki Semiconductor Manufacturing Corp. (NSM) and to transfer 300mm wafer fabrication lines there from Toshiba to Sony. Promoting this measure in an area where demand is volatile, and concentrating management resources in Oita Operations, will allow Toshiba to enhance its productivity and cost structure.

Tags: Toshiba, Semiconductor, Business, Sony, 40nm