Profit at Toshiba's key chips division likely to beat current forecast: exec

[TOKYO] Toshiba Corp expects its chips and devices division, its biggest profit driver, to beat its current annual earnings forecast, helped by a weaker yen and strong demand for flash memory chips, the head of the division said.

The sprawling conglomerate has been pinning its hopes on a strong performance in semiconductors as it seeks to recover from a US$1.3 billion accounting scandal last year. "It is highly likely that the division's profit will overshoot the current forecast," Yasuo Naruke, the senior executive vice president in charge of the business, told Reuters in an interview on Friday.

Toshiba just last month forecast that the division will generate an operating profit of 130 billion yen (US$1.1 billion)for the financial year to end-March. That accounts for the bulk of the company's overall operating profit forecast of 180 billion yen.

The yen has declined 11 percent against the dollar since Donald Trump was voted in to be the next US President, boosting earnings for Japanese exporters.

Mr Naruke also said orders for NAND flash memory chips from Chinese smartphone makers had been brisk. "Strong demand from Chinese smartphone makers is likely to continue until at least next summer, as they are expected to keep shifting to chips with higher storage capacity," he added.

Mr Naruke said that Toshiba expects to invest around 1 trillion yen in its flash memory chips business for the three years from April 2019, up from 860 billion yen for the three years prior.

REUTERS