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Technology Stocks : Alliance Semiconductor
ALSC 0.8100.0%Jul 10 5:00 PM EST
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To: Norrin Radd who wrote (4615)2/1/1999 5:25:00 PM
From: DJBEINO  Read Replies (1) of 9582
 
Toshiba To Outsource 40% Of Chip Production To Asian Firms

TOKYO (Nikkei)--Toshiba Corp. (6502) plans to outsource 40% of its annual chip production to Taiwan and Singapore firms by fiscal 2001, company sources said Monday. The outsourcing will be worth an estimated 400 billion yen.

Most Japanese chip makers produce almost all of their chips at their own plants, outsourcing an average of only 5% of overall production to Asian and other foreign firms. Toshiba hopes to save on capital investment and increase price competitiveness through the production consignment.

Receiving orders from Toshiba will be Taiwanese firms Winbond Electronics Corp. and Worldwide Semiconductor Manufacturing Corp. Chartered Semiconductor Manufacturing Ltd. of Singapore will also take orders from Toshiba. While these firm are not Toshiba affiliates, the Japanese electronics maker has been providing production technology to them.

For fiscal 1998, Toshiba plans to procure slightly less than 10% of its 800 billion yen worth of aggregate chip production from these firms but will increase the procurement ratio to 40% of its overall production of 1 trillion yen in fiscal 2001.

Winbond will produce 128 megabit DRAMs for Toshiba from this summer.

The increase in production outsourcing is expected to help Toshiba save 20-30% on capital investment necessary to increase production.
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