Tokyo: Toshiba Corp may turn its first annual profit on liquid-crystal display (LCD) panels in four years as sales of smartphones and tablet computers boom, the company’s CEO said in an interview on Thursday.
Norio Sasaki also said he expected demand for NAND flash memory chips to be stronger in the January-March quarter than in the current quarter ending this month. NAND is used in various electronics products including Apple Inc’s iPhone.
“If all goes well, it’s possible we could see profit in three figures this year,” Sasaki said of the LCD unit, implying at least ¥10 billion ($119 million) in the Japanese counting system, topping the company’s forecast for break even.
Sasaki, 61, took the helm 18 months ago, vowing to sharpen the focus of the sprawling conglomerate, taking a hard line on costs across businesses from nuclear power stations to home appliances.
He said he would be cautious about big investments in the volatile LCD sector. Earlier this week Toshiba denied a media report it was planning to spend about ¥100 billion on a new plant in Japan, mainly to supply Apple.
“Nothing is decided on further investment amid the current volatility, although the demand is there,” Sasaki said. “Profits would rise quickly. But when they stop rising, you have to make sure you don’t fall into the red.”
One US analyst said this week that Apple’s demand for NAND could double next year and some estimate Apple already consumes about a third of global supply.
Sasaki said that the effect on NAND shipments of a brief cut in power to the company’s Yokkaichi plant in central Japan on 8 Dec. would not become clear until at least the new year. The outage forced it to halt operations at the plant until 10 Dec.
Toshiba, the world’s second largest supplier of NAND chips after South Korea’s Samsung Electronics Co, had previously said shipments could fall by up to 20% in January and February.
The effect on Toshiba’s profits is also unclear, because the factory stoppage is likely to boost prices, Sasaki said. Toshiba is building a fifth NAND facility at Yokkaichi that is expected to be complete in spring of next year, but he declined comment on when it would start production.
Separately, Toshiba announced on Thursday that it would open a LCD TV manufacturing joint venture in Egypt next year, in an effort to take advantage of an expected rise in demand in the Middle East and Africa.