Toshiba loses its memory

Beleaguered chip maker Toshiba says it is pulling out of the manufacture of dynamic random access memory (DRam), as the chip industry continues to struggle.

The company was widely expected to sell off the standard DRam business or scrap it entirely to restore its ailing chip operations and return to profit in the next business year.

With talks running between Toshiba and Germany's Infineon Technology, there was some speculation that Japan's largest DRam maker would continue operations.

But the talks collapsed and Toshiba announced this week that it had agreed to sell a DRam plant in Virginia to Micron Technology, the world's second largest DRam maker.

Toshiba, which slid deep into the red with a £674m loss, said it expected to post a special loss of £215m in the current business year to restructure its chip business.

Micron Technology is also losing money on its chip business and has lost about $576m for its fiscal fourth quarter as sales tumbled 79 per cent.

South Korea's Hynix Semiconductor is in talks with Micron on a possible alliance aimed at coping with price swings in the cyclical memory chip market.

Hynix's restructuring chief Shin Kook-hwan told Reuters today that alliance talks between Micron and Hynix remained on track.

Meanwhile, there is speculation about what will happen to Infineon, which this week said in a statement that it was still open to memory chip co-operation talks with other manufacturers.