Toshiba's Tactic to Combat Decreasing Revenue

Dennis Faas's picture

In an effort to increase market shares and regain losses suffered because of falling prices, Toshiba recently announced plans to more than double their monthly production of NAND flash memory chips.

The company intends to increase its monthly output of NAND chips by using 300-millimeter wafers and hopes that the total monthly production will reach 210,000 chips by June 2008. (Source:

This would be an increase from only 100,000 total memory chips produced this past March.

NAND flash memory chips have become a major source of income for Toshiba. The abundance of rival companies and a recent change in consumer preference has caused the company to lower their prices in an effort to make their products more appealing to the average customer.

This year, Toshiba expects that the current highly-competitive market will force them to continue slashing prices by as much as 50% by March 2008. (Source:

In the hopes of combating some of the revenue losses such cuts will incur, Toshiba has begun drastically reducing production costs and making more advanced, higher-density products to protect its margins.

Toshiba recognizes that while prices for their memory chips continue to fall, the market demand is ever-increasing. Therefore, the company hopes that by producing more chips, consumers will purchase more and therefore restore all losses experienced this fiscal year.

One of the problems that may interfere with these optimistic plans comes in the form of their limited resources. With Toshiba's cost-cutting in effect, the company can only supply about 60% to 70% of its current orders. The focus is therefore on efficiency and an increase in the workload, which means more work for Toshiba employees to be done within the same narrow timeframe. (Source:

In the last fiscal quarter, Toshiba controlled 30.7% of the global NAND flash memory market.

The company has continued to fall behind Samsung Electronics Co., who hold an impressive 44.1% market share. (Source:

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