Toshiba to More Than Double Power Chip Output With New Plant

(Bloomberg) -- Toshiba Corp. will build a new 300-millimeter wafer fabrication plant for power semiconductors that will more than double its production capacity by March 2025, the company announced Friday.

Construction of the new facility in Ishikawa Prefecture in western Japan will take place in two phases, the company said. When the first phase is fully operational, Toshiba's power semiconductor capacity will be 2.5 times larger than in fiscal 2021. Toshiba will invest about 100 billion yen ($870 million) to build the facility, the Nikkei newspaper reported earlier.

The move comes as car and electronics makers struggle to procure even basic chips for routine tasks such as power management and wireless connectivity. TDK Corp. warned last month that shortages of components are unlikely to abate for the rest of this year, while console makers Sony Group Corp. and Nintendo Co. this week said they expect semiconductor and shipping challenges to persist.

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Vehicle electrification and the automation of industrial equipment are two major trends driving up demand for power-regulating chips, Toshiba said in its statement. It is targeting 100% reliance on renewable energy for the fab, it said.

Toshiba said in September it was struggling to fulfill orders last year because of shortages of materials and output capacity. Despite investor concern that demand will evaporate after the pandemic-fueled frenzy for electronics, the company is confident that orders will keep growing rapidly enough to sell out all its production lines for years to come.

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The announcement comes shortly before Toshiba is due to brief investors on its business strategies next week as it tussles with activist shareholders over the future of the company.

The company said in November that it plans to split into three firms as a way to create value for shareholders. But one major stock holder has publicly questioned the plan, while another leading investor has called on Toshiba to rebuild trust with shareholders after years of scandals and corporate governance issues.