Toshiba 2003 Annual Report Download - page 20

18 TOSHIBA CORPORATION A VIEW TO THE FUTURE
Expansion in China, the Growth Market
Any company looking to the future must give
full weight to the significant growth that Chi-
na promises in coming years. Toshiba does.
The Company is already a well-established
presence in China: 37 locally incorporated
subsidiaries promote activities across the com-
plete range of Toshiba’s businesses and already
employ approximately 13,000 people. In the
last fiscal year, Toshiba’s sales in China totaled
a healthy ¥350 billion and they are expected to
rise to at least ¥600 billion by 2005.
Given these figures, it comes as no surprise
that Toshiba considers expansion in China as
one of the most important issues for manage-
ment, or that the Company is now promoting
a series of policies to promote market success
and profitability.
China’s rapid development in recent years
has transformed the economy. Once thought
of simply as a cost-efficient production base,
China is now much more an important market
in its own right and a promising development
base for products and services. Toshiba’s activi-
ties in recent years reflect this evolution. By
October 2001, Toshiba China Co. Ltd. was
ready to open its own R&D Center, allowing
local development of products geared to the
Chinese market.
In April 2002, the Company established a
new Customer Service Center to promote a
central strategy—the ability to hear the voices
of customers, and to reflect their needs and de-
sires in products that are brought to market as
quickly as possible. This was followed by a se-
ries of key moves related to manufacturing.
Semiconductor Operations Reinforced
In July 2002, Toshiba revitalized its semicon-
ductor operation in China when it made Wuxi
Huazhi Semiconductor Co., Ltd. a wholly
owned subsidiary, buying out the interest of its
joint-venture partner, Huajing Electronics
Group Corp. This was only Toshiba’s first step
in a radical makeover. Renamed Toshiba Semi-
conductor (Wuxi) Co., Ltd., the company
received additional funds to raise its capital to
U.S. $15 million and moved to a new produc-
tion facility, where a two-year, ¥5 billion
investment program will raise production ten-
fold while extending it from bipolar and
Bi-CMOS ICs into discrete devices.
There were sound reasons for the move.
While China accounted for only 11% of the
world semiconductor market in 2002, that fig-
ure is expected to climb to as high as 20% by
2010. The new company gives Toshiba a cost-
efficient production base that will support
early delivery of products that meet the needs
of customers in China.
Manufacturing Portable PCs for the
Global Market
Toshiba Information Equipment (Hangzhou)
Co., Ltd. became the first company to start
operations at the new Hangzhou site. Toshiba
was developing to serve global markets, when
it began production of portable PCs in April
2003. In its first year of operation, the new fa-
cility will manufacture approximately 750,000
PCs with annual output expected to rise to
2,000,000 units in the near future. Over time,
the new company will cultivate development
and design capabilities, and also provide sup-
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