Toshiba nudges up profit outlook, memory chips buoyant

Reuters News
Posted: Oct 30, 2013 4:31 AM
Toshiba nudges up profit outlook, memory chips buoyant

TOKYO (Reuters) - Toshiba Corp, Japan's largest computer chipmaker, raised its operating profit outlook more than 10 percent for the year to next March, expecting continued buoyant demand for its NAND memory chips used in smartphones and tablets.

Toshiba raised its full-year operating profit forecast to 290 billion yen ($2.96 billion) from 260 billion after reporting a second-quarter operating profit of 81.2 billion yen, up 41.9 percent from a year earlier. The new outlook was still slightly below the average forecast of 305.1 billion yen from 24 analysts surveyed by Thomson Reuters I/B/E/S.

Toshiba has been running at full capacity to supply smartphone makers such as Apple Inc, after cutting production 30 percent last year when the market faced a glut. The outlook for smartphone growth remains strong.

"We think that in the second half the tightness in supply-demand that we've seen up to now will get back to normal," Toshiba Executive Vice President Makoto Kubo told an earnings briefing.

At the moment Toshiba is reaping a healthy return on sales in the upper end of the 20-30 percent range, Kubo said, but prices are expected to ease modestly in the current quarter.

Rival NAND chipmaker Samsung Electronics Co, which also makes DRAM memory chips used in PCs and mobile phones, said last week that its profit in semiconductors doubled in the July-September quarter due to rising prices.

Toshiba has earmarked 30 billion yen to expand the building that houses one of its NAND factories in western Japan, with construction to be completed around next summer. CEO Hisao Tanaka told Reuters in an interview earlier this month that the company would make a decision on potential spending of up to another 400 billion yen on equipment for the plant by next March.

(Reporting by Maki Shiraki and Sophie Knight; Writing by Edmund Klamann; Editing by Matt Driskill)