November 30, 2011 - Toshiba Corp. is closing three of its six Japanese discrete semiconductor facilities amid a reorg to concentrate front/backend production on "higher value-added products" and improve costs.

The three sites being phased out during fiscal 1H12 (beginning April 2012) are: Kitakyushu (Fukuoka prefecture) and Hamaoka (Omaezaki, Shizuoka prefecture), both doing frontend process for optical semiconductors; and Toshiba Components (Mobara, Chiba prefecture), home to backend process for power semiconductors. With the reorg, Toshiba will concentrate its discrete output at the three remaining sites:

- Himeji operations (Ibo-gun, Hyogo prefecture) for frontend power semis and small-signal devices;
- Kaga (Nomi, Ishikawa prefecture) will become a main facility for power frontend and increase 200mm capacity to take on frontend optical semis; and
- Buzen (Buzen, Fukuoka prefecture) will assume the function of backend (assembly/packaging) for optical semiconductors, increasing consignments to overseas suppliers and limiting production.

Employees affected by the shuffling, reportedly about 1200 workers, "will, in principle" be redeployed within other group companies.

In addition to the discrete production shifts, Toshiba also announced it will halve the 150mm output from its Oita analog/image sensor site, to push a move toward larger wafers and "improve manufacturing efficiency and cost competitiveness." (That move is said to impact about 500 workers.) The company also is instituting shutdowns at its Oita (six days 12/30-1/4, plus decreased output) and Himeji and Kitakyushu sites (shutdown through Jan. 5), and is lowering production over the next several weeks at three Toshiba Group companies: Iwate (ASICs and MCUs) and the aforementioned discrete sites Kaga and Hamaoka. Decisions on the operational shutdowns and production levels will be revisited in early January.

The moves are in response to global macroeconomics and sluggish demand for consumer products, notably PCs and TVs in Europe and the US, the company claims. That's hurting a number of Japanese electronics companies besides Toshiba, e.g. Sony and Panasonic. But another significant factor is the persistently-strong yen, which has been hovering around ¥76-¥78 for months, record post-WWII territory. Many Japanese companies are suffering as a result, because a strong yen impacts everything and is especially damaging to companies with global operations and markets (costs e.g. procurements and even earnings have to be converted into their yen equivalent, which is at a historically soft rate these days). Panasonic, for example, is said to have its profits eroded by billions of yen for every ¥1 rise vs. the US dollar or euro.