Japan's Toshiba Corp. said it would stop manufacturing notebook computers at its Philippine plant by the end of the year, shifting production to its main PC factory in Hangzhou, China, to cut costs.
Hit by aggressive pricing by Hewlett-Packard Co. and Dell Inc., Toshiba in the last business year cut the earnings forecast for its PC and PC peripherals division three times, and is now restructuring the business.
"As part of restructuring efforts, we are aiming to boost the ratio of outsourcing to over 50 percent. Naturally, the ratio of our own PC production is declining, making it more reasonable to consolidate production sites," a Toshiba spokeswoman said.
Toshiba's move underscores mounting pressure to cut costs and streamline operations to survive the white-hot competition in the global PC market.
International Business Machines Corp. (IBM) earlier this month announced it is selling its PC-making business to China's largest personal computer maker, Lenovo Group Ltd. for U.S. $1.25 billion, marking the U.S. firm's retreat from an industry it helped pioneer in 1981.
Toshiba's Philippine plant, which is located in Laguna province and employs about 6,500 people, makes hard disk drives as well as notebook PCs.
Toshiba said it aims to secure employment for PC workers as much as possible by shifting them to disk drive production.
The Philippine plant currently manufactures 100,000 notebook PCs a month, while Toshiba aims to double annual PC production at the Hangzhou plant to 3 million units by the year ending in March 2006. (Reuters)
to Daily News