Toshiba touts flash memory profits

 

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By Reuters

Posted on 29 Oct 2007 at 15:57

Toshiba has raised its full year profit forecast by 12% on the back of solid flash memory sales.

Toshiba recorded an operating profit of 61.34 billion yen in July to September, buoyed by its flash memory and power segments. The company subsequently raised its end of year forecast from 260 to 290 billion yen.

However, its rosy outlook in microchips and power systems outweighs its slumping digital product segment, where it cut its forecast by 70% to 10 billion yen.

The company says its television and hard drive segments are hurting from price competition in the US and in Europe.

"This is Toshiba's weak spot," says CLSA analyst Takeo Miyamoto. "The company says the business is on the brink of a turnaround, but I get the feeling I've heard that one before."

The quarter also saw Toshiba's liquid crystal display business slip further into the red as prices of mobile phone displays plunged.

"We aim to break even in both LCDs and TVs by the end of the business year, by examining costs thoroughly," said Executive Vice President Fumio Muraoka at an analyst meeting.

Toshiba plans to build a new NAND plant by 2009 as well as buy microchip production lines from Sony. Until then it is likely to have its lines running at full capacity, up from 90% in the current quarter and 75% in July-September as supply tightens, Muraoka says.