Tokyo--Toshiba Corporation today announced that it has acquired 400,000m² of land, including future purchase rights, in Hangzhou, Zhejiang Province. The site was acquired as a part of Toshiba's corporate strategy of constructing an optimized global production network, and will be utilized by Toshiba's in-house companies and its group companies. Toshiba will establish a new subsidiary in June this year to manage the land, support deployment of production infrastructure and production.

China enjoys numerous advantages as a production base, including the ability to support globally-competitive manufacturing and infrastructures. China is also the world's biggest market, with a population of over one billion, and market growth is expected to receive an impetus from China's WTO membership.

Many manufacturers of components for information equipment are located in Hangzhou, the site of Toshiba's land acquisition, a cluster that supports highly efficient component procurement and logistics. The many universities in the region will also allow Toshiba to offer employment to talented people, particularly engineers. In 1991, Toshiba established Hangzhi Machinery & Electronics Co., Ltd. to manufacture electronic devices for industrial and home appliances. The smooth operations of this Hangzhou-based operation, and the good relations Toshiba has established in Hangzhou, further persuaded Toshiba to make the purchase.

Toshiba currently has 24 subsidiaries and affiliates in China, in operations ranging from electronic components to heavy electrical appliances. Further expansion of Chinese operations will take the locally employed workforce to the 17,000-level. In addition to manufacturing, Toshiba will direct its resources to high-tech development in cooperation with Chinese universities and locally hired engineers and researchers.

Toshiba's long-term strategy will see several businesses establish production sites in China. Positioning Hangzhou as common center for all of them will promote highly efficient, optimized Chinese production network and reinforce global competitiveness. This approach allows Toshiba's in-house companies and group companies to shorten lead times in entering the Chinese market and establishing new manufacturing sites, and enhances the ability to meet market requirements in a very short period.

The new site will primarily be used to expand IT-related businesses, and a manufacturing subsidiary for portable PCs will be the first operation there. It will start operation in April 2003 as Toshiba's second portable PC production site in China, after Toshiba Computer Systems (Shanghai) Co., Ltd., which was jointly established with Chinese company in Shanghai and started production in 2000.

This second plant will reinforce global logistics and product competitiveness by shortening time-to-market for Toshiba's PCs, and also reinforce Toshiba's position in the Chinese market for portable PCs.

Toshiba will extend use of the new site to cover production of components, product assembly in due course, and will gradually create an integrated IT production complex serving the global IT market. The company is now considering detailed plans for this.

Outline of New Subsidiaries

Operating Company

Portable PC Production Company