Toshiba Corp will overhaul its chip operations, outsourcing output of some system chips to Samsung Electronics and selling a production line to Sony Corp, as it reduces its non-memory chip exposure. Toshiba, the world's No 3 chipmaker behind Intel Corp and South Korea's Samsung, is restructuring its chipmaking operations after the business logged an operating loss of 280 billion yen ($3.4 billion) in fiscal 2008 amid the global financial crisis.
For new orders for the next financial year beginning in April, Toshiba will design cutting-edge system chips but will outsource production to Samsung, and maybe other foundries, to avoid costly capital investment outlays. The rare deal between rivals Toshiba and Samsung, which is expanding into microprocessors, frees up resources for other projects, which analysts see as positive. Toshiba said it would sell to Sony its system chip production line in Nagasaki prefecture, a deal which an industry source has estimated at 50 billion yen.