Toshiba, the world's No.3 chipmaker behind Intel Corp and Samsung, is trying to restructure its chipmaking operations after the business logged an operating loss of 280 billion yen ($3.4 billion) in fiscal 2008 amid the global financial crisis.
For new orders starting next fiscal year, which begins in April, Toshiba will design cutting-edge system chips but will outsource production to Samsung, to avoid costly capital investment outlays, the Nikkei said.
Shares of Toshiba rose 1.4 percent to 443 yen after the report, outperforming the benchmark Nikkei average, which fell 0.7 percent.
Toshiba officials were not immediately available for comment.
Toshiba has continually improved the functionality of system chips -- used in mobile phones, televisions and automobiles -- and trimmed circuit widths in response to demand for smaller, more energy efficient equipment, Nikkei said.
With plant constructing costs ballooning to about 300 billion yen due to expensive production equipment, the partnership with Samsung enables Toshiba to save money by eliminating the need for capacity upgrades, the daily said.
Samsung was chosen for production as it has advanced technologies and the ability to churn out large numbers of high-performance chips at low cost, Nikkei said.
As a part of its chip business restructuring, Toshiba is also in talks with Sony to sell its microchip production line in Nagasaki prefecture for an estimated 50 billion yen, sources told Reuters on Wednesday.
Toshiba, the world's No. 2 supplier of NAND flash memory with a market share of 34.9 percent, will focus on memory chips, the Nikkei said, adding it will continue to compete with Samsung, which has a 39.3 percent market share, in this field.
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