Toshiba Pulling Out of Chip Manufacturing to Save Costs

Toshiba to Outsource Chip Production to Globalfoundries

by Anton Shilov
01/24/2011 | 11:13 PM

After Toshiba Corp. decided to sell its chip manufacturing plant to Sony Corp. it became almost clear that the Japanese flash memory giant did not see itself as a maker of advanced chips anymore. According to latest developments, the company is indeed pulling out of chip making business and intends to outsource manufacturing to Globalfoundries.

 

"We had been considering outsourcing production to Samsung Electronics and GlobalFoundries since last year," said a spokesperson for Toshiba in an interview with Nikkei news-paper, reports Reuters news-agency.

The two sides are in the final stages of negotiations, Doug Grose, chief executive officer of Globalfoundries, the contract maker of semiconductors controlled by Advanced Technology Investment Company and Advanced Micro Devices, told the Nikkei in an interview.

Toshiba will outsource chips that are supposed to be made made using 28nm or 40nm process technologies and will save both on research and development costs as well as on high-end equipment. Toshiba used to be a partner within IBM’s “fab club”, which develops process technologies in collaboration, but as fabrication processes became more complex, the company decided to pull out.

Samsung will likely handle low-cost fabrication of Toshiba's mainline image-processing chips, while GlobalFoundries will churn out semiconductors using the latest technologies, according to the news-agency.