Tokyo: Toshiba Corp said it would invest $14 billion on capital spending over the next three years with a focus on semiconductors, nuclear power and other businesses where it feels it has an advantage over global rivals.
Toshiba’s strategy mirrors a shift among other Japanese electronics conglomerates to narrow the focus of their spending to build scale and improve profit margins in a smaller number of products to survive heightening global competition.
Toshiba, the world’s No. 2 maker of NAND-type flash memory chips after South Korea’s Samsung Electronics, will allocate ¥1.3 trillion ($13.9 billion) for capital spending, investment and loans over the three years to March 2013.
The bulk of that investment, which represents a 74% average annual increase over the just ended business year, will go to the division handling semiconductors and its social infrastructure operations, which covers nuclear power.
Toshiba said it would aim to lift opeating profit to ¥450 billion in the year to March 2013, from ¥117 billion in the just ended year. It aims to boost sales by 25% to ¥8 trillion in three years, driven by overseas expansion.
The company plans to spend ¥1.1 trillion on research and development, about a third of which will go to the social infrastructure business, which also includes industrial motors and electrical equipment for high-speed trains.
Toshiba has said it will resume plans to build a new factory for NAND flash memory chips, which are used in consumer products such as Apple Inc’s iPhone and iPad.
Along with an output increase, semiconductor spending will will also go towards shrinking chip sizes.
Toshiba currently makes NAND flash memory chips with circuitry widths of 32 and 43 nanometres, and plans to begin producing chips with circuitry widths somewhere between 20 and 29 nanometres in the second half of 2010.
One nanometre is a billionth of a metre, and narrower circuitry allows semiconductor makers to pack more storage capacity on a smaller piece of silicon and cut per-chip production costs.
Toshiba shares were down 4.4% at ¥495 in afternoon trade, underperforming a 1.2% fall in the electrical machinery index.