Toshiba announced a reduction in its production of NAND flash memory, which go into smartphones, tablets and storage devices, by about 30% from this morning, to cope with oversupply conditions in the market.
The market for NAND flash in the first quarter was affected by weak pricing, as a result of a mismatch between an industry-wide growth in supply and a seasonally slow quarter for consumer demand, research firm IHS iSuppli said in June.
Toshiba said it was making an adjustment in production of NAND flash memory at its Yokkaichi Operation plant in Mie Prefecture, Japan. Oversupply of NAND flash memory in the retail market, for application in USB memories and memory cards, resulted in price declines since the beginning of the year. The Japanese company said it responded by adjusting shipments to the retail market since June and from today will reduce the operating rate at the plant in order to adjust output.
The high growth that is forecast for PCs and smartphones, the drivers of global market demand for NAND flash memory, is however expected to improve the balance between supply and demand in the current July to September quarter, the company said.
Toshiba is after Samsung the second largest maker of NAND flash memory by revenue, and is closing the gap with the South Korean market leader, according to IHS iSuppli. Toshiba posted sequential revenue growth of 19% in the first quarter in its NAND flash business, even as the overall NAND flash market had a 1% sequential decline in revenue, and all the other suppliers experienced sales decreases, most by double-digit percentages, it added.
Toshiba said it will continue to closely monitor the NAND market and re-examine production at Yokkaichi as necessary.