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Toshiba eyes Gates nuclear alliance, chip plant

Toshiba eyes Gates nuclear alliance, chip plant
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First Published: Tue, Mar 23 2010. 10 41 AM IST
Updated: Tue, Mar 23 2010. 10 41 AM IST
Tokyo: Japan’s Toshiba Corp said it is in talks with a company backed by Microsoft chairman Bill Gates to jointly develop advanced nuclear reactors, helping push Toshiba’s stock up nearly 5%.
Separately, Toshiba announced that it would restart plans to build a NAND flash memory factory due to a recovery in demand. It will start construction on the plant in July and begin production in early 2011.
Toshiba said it was in talks with the Gates-backed firm TerraPower to develop so-called travelling-wave reactors (TWRs), which are designed to use depleted uranium as fuel and thought to hold the promise of running up to 100 years without refuelling.
That compares with conventional light-water reactors, which require refuelling once every several years.
The Nikkei newspaper, which first reported the news earlier on Tuesday, said Gates could invest several hundred billion yen (several billion dollars) of his own money in the project, with commercialisation likely to take more than 10 years.
Toshiba spokesman Keisuke Ohmori said the talks with TerraPower are at an early stage and nothing has been decided.
Small-sized reactors like the TWR would make a good fit for emerging markets, said Deutsche Securities analyst Takeo Miyamoto.
“If you put a regular reactor like the one used in Japan in some emerging nations, that could sometimes create overcapacity and make it difficult to back that reactor up when you take the unit off line for maintenance,” Miyamato said.
“There would be demand for this type of reactor in newly developing countries,” he said.
Shares of Toshiba gained 4.7% to ¥471. The benchmark Nikkei average fell 0.4%.
Toshiba, which owns US nuclear firm Westinghouse, has already developed a design for an ultra-compact reactor, known as the Super-Safe, Small and Simple (4S) and designed to operate continuously for 30 years.
Toshiba plans to start construction in the United States on its first 4S reactor by 2014 after receiving regulatory approval. The reactor would have output capacity of 10,000 kilowatts.
Toshiba anticipates that that about 80% of the technologies used in its 4S reactor can be applied to TWRs, which will likely be comparable to many of today’s reactors with output ranging from 100,000 to 1 million kilowatts,the Nikkei said.
One hurdle for commercialisation of TWRs is the development of materials that can withstand nuclear reactions for such long periods of time.
Separately, Toshiba said it had decided to start construction of its fifth NAND flash memory plant in Mie, central Japan, in reaction to a recovery in demand, driven in part by the growing popularity of smartphones.
Toshiba said it has not yet decided on the scale of the investment or output capacity. The Nikkei reported last month that Toshiba would spend about ¥800 billion ($8.9 billion) on the plant.
Toshiba had originally planned to start building the factory in the spring of 2009 and for it to be completed this year, but it put the project on hold due to the industrywide slump.
Rivals Samsung Electronics Co and SanDisk Corp have also recently become more upbeat on the chip market.
“The flash memory industry is in an extremely tight spot right now, and makers simply cannot catch up with demand, as Apple gobbles up the bulk of the supply,” said Kazutaka Oshima, president of Rakuten Investment Management.
“The supply shortfall is such that some makers even have to buy semiconductors from other makers from the spot market to satisfy their supply obligations.”
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First Published: Tue, Mar 23 2010. 10 41 AM IST