Sept. 19, 2002 – Tokyo, Japan – Toshiba Corp. plans to increase outsourcing of system chips to allow its domestic factories to focus on the production of high-value goods.

The company plans to outsource about 20% of upstream system chip wafer processing to Korea’s Dongbu Electronics Co. and to Israel’s Tower Semiconductor, reported the Nihon Keizai Shimbun.

Toshiba is not outsourcing any wafer processing at present, since its domestic system chip plant in Oita Prefecture is not operating at full capacity.

But as demand increases, it will outsource work to the two foreign companies.

It also plans to accelerate outsourcing of downstream operations such as assembly and inspection processes to overseas subsidiaries in countries such as China and Thailand, boosting the ratio of products handled outside of domestic plants from over 10% of total output now, to 50%.

To protect its trade secrets, however, the company plans to keep proprietary products such as Nand flash memory exclusively in the hands of domestic production facilities.