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Toshiba Announces Restructuring of System LSI Business

24 Dec, 2010

Tokyo, Japan, December 24, 2010 – Toshiba Corporation (TOKYO: 6502) today announced that it is promoting a series of measures to transform its System LSI business, with the goal of boosting profitability by allocating resources to focus product areas, and executing a thorough review of its business model to achieve fabless and fablite models. Towards this, the company will restructure its current System LSI Division on January 1, 2011.

Toward accelerating decision-making speed and optimizing use of management resources, the division will be reorganized into two: the Logic LSI Division, responsible for cutting-edge SoC (system-on-chip) fabricated on 300mm wafer fabrication lines; and the Analog and Imaging IC Division, which supplies key components for a wide range of products.

The Logic LSI Division will promote a flexible manufacturing strategy responsive to demand volatility by combining use of its own production line with outsourcing. The division will expand outsourcing of cutting-edge products, including 40nm products, to multiple foundries from fiscal year 2011. By consolidating production on 300mm wafers at Oita Operations, the division will increase management efficiency and will also be able to channel more resources to its development and design sections.

The Analog and Imaging IC Division will concentrate on analog ICs and imaging ICs, particularly CMOS image sensors, and use existing production lines at Oita Operations, including 300mm wafer lines, and Iwate Toshiba Electronics Co., Ltd. The main focus will be general-purpose products, allowing the division to streamline its production lines. This approach is expected to support business expansion and to enhance profitability.

Since the 2008 financial crisis, Toshiba's system LSI business has promoted strategic allocation of resources under the Toshiba Group Action Programs to Improve Profitability announced in January 2009. The main focus has been on promoting analog ICs, CMOS image sensors and digital SoCs, discontinuing unprofitable products, and restructuring the back-end process through consolidation and increasing overseas production ratio.

As part of the strategy for transforming the system LSI business and securing an asset light business model, Toshiba has signed a memorandum of understanding with Sony Corporation, expressing the intent to dissolve Nagasaki Semiconductor Manufacturing Corporation (NSM) and to transfer 300mm wafer fabrication lines there from Toshiba to Sony. Promoting this measure in an area where demand is volatile, and concentrating management resources in Oita Operations, will allow Toshiba to enhance its productivity and cost structure.

Going forward, Toshiba expects the present transformation and reorganization to promote operating structures optimized to the characteristics of each part of its system LSI business, and to achieve an organization that contributes to improved profitability.