Toshiba Corp. will slash 20,000 jobs from its group workforce of 190,000 to cope with deteriorating earnings in its semiconductor business amid the worldwide slump in the information technology sector, company officials said Saturday.

The restructuring plan will affect workers in all areas — not only those in the company’s semiconductor-related divisions but also home-electric appliances and heavy electricals, they said.

Streamlining of the company’s chip-making business will involve the transfer of its two mainstay operations — dynamic random access memories and flash memories — to a third company to be set up jointly with a foreign firm, the officials said.

The two operations accounted for about 30 percent of total semiconductor sales registered by the Toshiba group last year.

The transfer will affect the 1,040 employees at the Yokkaichi factory in Mie Prefecture, a production center for Toshiba’s memory-chip business, the officials said.

Toshiba is considering tapping Samsung Electronics Co. of South Korea or a subsidiary of Siemens AG of Germany as a possible partner for the joint chip-making company, the officials said.

About 10,000 Toshiba group workers abroad will be subject to restructuring, including dismissal, while the same number of domestic employees will be asked to move to other firms or quit the company. In March, the firm said it would reduce its domestic workforce by 6,500 by March 2004.

Toshiba will release the restructuring program when it revises its business outlook for the current business year this week, the officials said.

Last year, Toshiba eclipsed NEC Corp. in semiconductor sales to become Japan’s biggest chip manufacturer for the first time.

But its earnings in the chip business suffered significantly in the wake of falling product prices worldwide, forcing it to curb capital spending and scale back production since the beginning of 2001. Prices of DRAM chips plunged 90 percent in the past year while those of flash memories have been halved.

As a result, Toshiba is expected to see a 96 percent decline to only 10 billion yen in its group operating profits for the current business year to next March 31, compared with an initially targeted 20 billion yen, according to news reports.

Earlier this year, Fujitsu Ltd. and its group firms announced a combined job cut of 16,000 and NEC announced 4,000 cuts.

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