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Toshiba to Set Up a Manufacturing Company for Information Equipment

22 May, 1995

TOKYO -- Toshiba Corporation today announced a major investment program in the Philippines, under which it will establish a wholly-owned manufacturing subsidiary for the production of hard disk drives (HDDs), CD-ROM drives and printed circuit boards for personal computers.

The new firm, provisionally named Toshiba Information Equipment (Philippines) Inc., will be formally established in July 1995, with an initial capitalization of 1.3 billion yen (approximately 320 million Philippine peso). It will begin construction in November this year of a 14,000m2 manufacturing facility on a 60,000m2 site in Laguna, a suburb of Manila, with completion slated for August 1996. Toshiba's total investment in the company, including the site, will amount to some 4 billion yen in the three years to 1998.

By October 1998, the plant is expected to reach an annual production capacity of 1.8 million 2.5-inch HDDs, 3.6 million CD-ROM drives and 360 thousand printed circuit boards for PCs. By that time, it is expected to have created around 1,400 jobs in production and administration.

HDD and CD-ROM drive manufactured in the Phillipines will be exported to the U.S., Europe and Asia including Japan. Printed circuit boards will be exported to the U.S. and Germany to be used in Toshiba's PC manufacturing plants in Irvine, California, and Regensburg, Germany.

Demand for personal computers is growing, with the world market expected to reach 50.37 million units this year, an increase of some 14%. This is fueling demand for hard disk drives and CD-ROM drives. 1995 world market estimates for 2.5- inch HDDs indicate a 37% rise in demand to a volume of some 12.3 million, while demand for CD-ROM drives is forecast to grow by approximately 47% to 25 million units. The new manufacturing facility allows Toshiba to meet this surging demand and to supplement output from its domestic facility.

Toshiba selected the Philippines as the home for the new firm because of its ready availability of a highly-skilled work-force and its reliable logistics infrastructure for exports to Japan, the U.S. and Europe. Another key factor is widespread fluency in English, which will facilitate direct communication between local and Japanese staff and smooth the way for technical transfers and achieving the high levels of product quality and yield that Toshiba expects in its operations.

The new company will work in cooperation with Toshiba Group's international procurement offices, including those in Singapore and Hong Kong, to source components and to counteract the impact of yen appreciation. Eventually, the new company is expected to take on design of low-cost models, utilizing parts sourced in Asia.

Outline of the new company:

Name:               Toshiba Information Equipment 
                    (Philippines) Inc. (provisional) 
Established:        July 1995 (proposed) 
Capital:            Approximately 1.3 billion yen 
                    (approx. 320 million Philippine peso) 
Location:           Laguna, the Philippines 
Site area:          Approx. 60,000 square meter 
Floor area:         Approx. 14,000 square meter 
No. of employees:   Approx. 1,400 (1998) 
Production start:   October 1996 (planned) 
Products:           Hard disk drives, CD-ROM drives and 
                    printed circuit boards

Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement,but is subject to change without prior notice.

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