Focusing on the power chip business, Toshiba will invest 840 million US dollars to expand power semiconductor production capacity

According to Nikkei reports, in the new fiscal year starting in April, a subsidiary of Toshiba will increase capital expenditure to expand the production capacity of power semiconductor devices at its main production base to meet strong demand. The capacity upgrade is expected to make Toshiba's power semiconductor production capacity increased by about 150%.

Toshiba Electronic Devices and Storage has earmarked an investment of 100 billion yen (about $839 million) for fiscal 2022, up about 45 percent from 69 billion yen in fiscal 2021. The funding will fund the construction of a new manufacturing facility at the site of production subsidiary Kaga Toshiba Electronics in Ishikawa Prefecture, which is scheduled to start in spring 2023. In addition, a new production line will be installed in the existing plant. The upgrades are expected to increase Toshiba's power semiconductor production capacity by about 150 percent.

Power chips are used for power supply and power control of electronic devices, helping to improve energy efficiency. With the advancement of carbon neutrality plans in various countries around the world and the transition of vehicles to electric drives, the related demand is increasing rapidly. Toshiba's expanded production capacity will include not only power devices made from silicon wafers, but also next-generation chips using silicon carbide and gallium nitride materials.

At the same time, Toshiba will also expand its investment in hard disk drives. As another major product category, Toshiba has developed technology to boost storage capacity beyond 30 TB, or more than 70 percent above currently available levels, and has begun planning initial commercialization.

Toshiba Electronic Equipment and Storage expects two categories of products, data center hard drives and power equipment, to drive the next growth, so it has urgently increased investment in these two areas. In order to focus more on these businesses, the company reorganized its business operations in fiscal 2020 and stopped new development of the system-on-chip business.

Toshiba has earmarked 290 billion yen to invest in the equipment business over the five years to fiscal 2025, compared with 150 billion yen in the previous five years. Toshiba has used about 60% of its budget in the first two years of the current five-year period and is considering additional investment funds if necessary.

Previously, Toshiba had announced plans to split into three subsidiaries focusing on infrastructure, equipment and semiconductor memory companies. But major shareholders objected, and it was unclear whether Toshiba would eventually break up.