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Toshiba to restructure its System LSI Businesses
Toshiba has previously announced that it was considering a structural reform of the system LSI business operated by Toshiba Electronic Devices & Storage Corporation (TDSC). Now the plan is set.
Going forward, TDSC says it will continue to channel resources into its profitable discrete semiconductor business, and promote synergy between discretes and analog integrated circuits and microcontroller units for motor control, in order to secure high profitability. In its explanation to the decision, Toshiba says that the group has established a sustainable financial base and stable portfolio by focusing on B2B, which is not as easily affected by economic fluctuations. The group took this route by divesting its B2C businesses, including home appliances and PCs, and its memory business. Adding to this the company also implemented procurement and sales reforms and other measures aimed to continually strengthen basic profitability. The group withdrew from the memory business, which required large capital expenditures and where performance fluctuated with changing market conditions. In TDSC's semiconductor portfolio, it has concentrated on automotive, industrial use and data centers as a means to improve its investment efficiency, profitability and performance stability. TDSC's system LSI business is designated by Toshiba as a monitored business. In response to this, the company took steps in the last fiscal year that included withdrawal from logic LSIs (advanced ASIC), excluding automotive digital integrated circuits and products to support current customers, and measures to cut fixed costs. So in order to maintain its goal of a sustainable financial base and a stable portfolio, TDSC says in a press statement that it will implement a structural reform of its system LSIs business. Therefore, Toshiba has decided to withdraw from the system LSI business and to implement measures toward establishing a business structure not easily affected by market fluctuations; one that is sustainable even during the continuing U.S. -China trade conflict, and in the post-COVID-19 new normal business situation. This will, according to the company, be achieved by concentrating on its core competencies. Specifically, TDSC will concentrate its resources on analog integrated circuits and microcontroller units for motor control, a market that the company anticipate will show steady growth, and where it can expect to see synergies with its discrete devices. The company says will continue to direct product development resources to this area. In the advanced LSI (system-on-a-chip) business however, TDSC will end new product development while continuing to support current products. The company says it’s also considering other restructuring measures in addition to the personnel measures, without elaborating further. TDSC says will implement personnel reallocations and an early retirement incentive program. The program will cover employees in TDSC’s System Devices Division, administration and sales staff in its Semiconductor Division, and its corporate administration staff. It will also cover some R&D staff and employees at certain TDSC’s subsidiaries. The anticipated scope of the program and personnel reallocation will affect 770 employees in total.
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