Toshiba Corp. plans to build a plant that will produce semiconductor chips used in digital cameras, advanced mobile phones and other items, it was announced Wednesday.

The firm is expected to spend around 200 billion yen over the next three years to build the factory, which will produce chips based on next-generation wafers 30 cm wide.

The capital outlay is contingent on future price trends for sophisticated chips.

Toshiba will either build the plant on the premises of its system large-scale integrated circuit factory in the city of Oita or on the premises of its flash memory plant in Yokkaichi, Mie Prefecture.

Toshiba reportedly fears that its semiconductor operations may lag behind those of European, U.S. and Asian competitors unless it can produce more sophisticated chips via fresh capital outlays, industry analysts said.

Japanese chip makers have cut back on capital outlays related to semiconductor chips, with their profitability having declined since the implosion of the information technology industry bubble.

The 30-cm wafer technology tends to provide greater cost effectiveness than existing wafer-producing technologies, once mass production gets going.

In April, Toshiba abandoned manufacturing operations relating to dynamic random access memory chips, whose prices had been declining.

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