Toshiba head wary on NAND spending amid supply glut

By Taiga Uranaka

TOKYO, June 25 (Reuters) - Toshiba Corp's (6502.T: Quote, Profile, Research) new president said he would take a cautious approach to boosting production of NAND flash memory given the market still had a glut of chips and in view of the risk that rivals may follow suit.

Toshiba, Japan's biggest chip maker, has been shifting its focus to its stable power business while cutting spending in its loss-making semiconductor business, which has eroded its capital and forced it to raise $5 billion earlier this year.

Toshiba, which analysts expect will log a second straight net loss in the year to March 2010, is waiting for demand for electronics to pick up before deciding on whether to restart stalled plans to build two NAND plants, Norio Sasaki said.

"If we say we are raising capacity, others will do the same... When we all act out of suspicion and do not read (the market) well, it yields excess output," Sasaki said on June 19 in a group interview embargoed until Thursday.

Sasaki, who was approved as president at an annual shareholders' meeting on Wednesday, rose through the ranks in the company's power generation division and led the firm's acquisition of U.S. nuclear power firm Westinghouse in 2006.

Known to be a tough taskmaster and a workaholic at the company, Sasaki can crack a joke, too. Among Toshiba's products, he likened himself to a nuclear reactor -- "because I am heavy."

His promotion to the top spot marks a shift in Toshiba's focus towards industrial power systems and away from the consumer electronics business from where his predecessor, Atsutoshi Nishida, hailed.

Toshiba's plan to build two NAND flash memory plants in Japan this year has been derailed by relentless annual chip price falls of more than 70 percent.