Toshiba 2012 Annual Report Download - page 31

We are entering the age of Big Data. Through the July 2011
merger of two in-house companies—one handling hard
disk drives (HDD) and enterprise-use SSD (storage devices
based on NAND  ash memory) and the other NAND  ash
memory and SSD for PCs—into the Semiconductor &
Storage Products Company, we strengthened the
increasingly important storage device business. The new
company, the only one with technologies and know-how in
NAND flash memory, SSD and HDD, is establishing an
integrated storage business structure allowing it to
respond to changes in the competitive environment and
deliver optimal storage solutions to the global market. In
the Discrete business, we position power devices,
contributors to improved power efficiency and energy
saving, as a growth business. In the System LSI business, we
are developing business models that match each business
characteristics of our Logic LSI and Analog and Imaging ICs.
Discrete business
In FY2011 the discrete business recorded lower sales and
lower operating income, reflecting reduced demand
following the Great East Japan Earthquake and reduced
production capacity from  ood damage at our Thai facility.
We are responding with a comprehensive restructuring to
strengthen the business and improve profitability. In the
 rst half of FY2012, our six production sites in Japan were
consolidated at three locations: Himeji Operations–
Semiconductor, Kaga Toshiba Electronics Corp. and Buzen
Toshiba Electronics Corp. Production will be suspended at
the three other sites: Kitakyushu Operations, Hamaoka
Toshiba Electronics Corp., and Toshiba Components Co.,
Ltd. Following the consolidation, the remaining sites focus
on high value-added products and reinforce cost
competitiveness. In power devices, a high focus product,
we will continue to add capacity by increasing investment
in the 200mm wafer production fab at Kaga Toshiba
Electronics Corp.
System LSI business
The production line at Iwate Toshiba Electronics Co., Ltd., a
manufacturing subsidiary in Kitakami City, Iwate Prefecture,
was damaged in the Great East Japan Earthquake but is now
back on line. Reduced capacity due to the disaster and the
subsequent slowdown in the consumer products market,
plus an order falloff triggered by the flooding in Thailand,
caused the business as a whole to record considerably lower
sales in FY2011. Despite this, operating income improved
significantly against the previous year, on continuing
structural reforms. Measures here include shifting to larger
diameter wafers and closing small diameter production lines,
and halving the number of products. We will continue these
initiatives and in Analog and Imaging ICs we halved
production on 150mm wafers at Oita Operations by June
2012. In the Logic LSI business, we are constructing a  exible
production system that combines in-house and outsourced
production. Going forward we aim for a quick return to the
black through increased sales in overseas growth markets,
with a focus on CMOS image sensors.
Memory business
In FY2011, our NAND  ash memory business, where we are
number 2 in global market share*1, won a significant
amount of the new demand for use in mobile devices, such
as smartphones. A fall in yen-based prices, the result of
adverse exchange rate fluctuations, was the underlying
reason for recording lower sales  gures. By strengthening
cost responsiveness and advancing process migration, we
secured a certain level of operating income.
We will strengthen competitiveness in the memory
business by promoting process migration and expanding
our line-up in anticipation of future demand growth. In
April 2011 we started sample shipments of the world’s
 rst*2 NAND  ash memories fabricated with 19-nanometer
process technology and mass production followed in
September. In February 2012 we unveiled a NAND flash
memory with the world’s highest density*3, 128-gigabits.
This achieved the world’s fastest*4 data write speed, a rate
of some 18-megabyte per second, due to the integration of
high speed write circuitry developed in-house, and the
world’s smallest*5 chip size. Our investments re ect market
conditions. We completed construction of Fab 5 at
Yokkaichi Operations in July 2011, followed by the start of
mass production. Moving ahead, we will continue to focus
on maximizing investment e ciency and generating stable
pro t at a high level.
Semiconductor & Storage Products Company
Fab 5 at Yokkaichi
Operations
(Clean room)
Business Review / Electronic Devices Segment
29
TOSHIBA Annual Report 2012