TOKYO (AP) -- Toshiba Corp. said Tuesday that it will reduce output of NAND flash memory by 30 percent due to falling sales of electronic gadgets like digital cameras and cell phones.
"Recession in the global economy and the slowdown in consumer spending are having a significant impact on demand for semiconductors," Japan's biggest chipmaker said in a statement. "This is particularly notable in NAND flash memories, where decreased demand for applications such as memory cards and MP3 players has generated excess supply."
While the production cut is effective as of January, Toshiba will begin scaling back operations this month at its plant in Yokkaichi City, central Japan.
Two NAND flash memory production lines using 300-millimeter wafers will be suspended for 13 days from Dec. 31, and the company's two 200-millimeter wafer lines will stop for four days. Toshiba also said it would stop production during the new-year period at three additional plants that make other types of chips.
Sales of NAND flash memory fell 41 percent in dollar terms in October even as they rose 123 percent in terms of memory capacity shipped, according to data released by the Semiconductor Industry Association earlier this month.
"The slowdown in worldwide semiconductor sales that became evident in September continued in October," said SIA President George Scalise in a statement. "The worldwide financial turmoil is expected to continue to impact demand for semiconductors as we enter 2009."
Toshiba said it would continue monitoring the NAND market and review production plans as needed.
In the July-September quarter, Toshiba reported a net loss of 26.85 billion yen ($296.7 million), a sharp downturn from the 25.0 billion yen ($276.2 million) profit it booked during the same period last year.
The Tokyo-based company's semiconductor business was particularly hard hit, dragged down by an appreciating yen and steeper-than-expected price declines for NAND flash memory.
In trading on the Tokyo Stock Exchange Tuesday, shares of Toshiba fell 0.6 percent to 325 yen. The issue has fallen nearly 60 percent this year.