Toshiba Concerned Chip Crisis May Deepen After Ukraine Invasion

By BLOOMBERG

Toshiba Corp. said supply challenges for electronic components are unlikely to abate for another year as chronic shortages remain, while Russia’s invasion of Ukraine, a key supplier of chipmaking materials, may also have an impact.

“The sense of shortages hasn’t changed at all,” Hiroyuki Sato, the head of Toshiba’s devices unit, said in an interview. “We expect the current tight supply will last until March next year” at the earliest.

Ukraine is a major supplier of purified rare gases such as neon and krypton, both essential to making semiconductors. It accounts for almost 70% of the world’s neon gas capacity, according to TrendForce data. While some chipmakers have downplayed the impact of disruption from the war, it’s “clearly not positive,” according to Sato.

Toshiba’s devices division produces unglamorous but necessary computer components such as power-regulating chips. The company issued a supply warning in September, and Sato said the situation and outlook haven’t improved since then.

Prices are also likely to keep increasing, according to Sato.

“It’s been a year since prices of various inputs such as metals began rising, and we still can’t foresee when that trend will reverse,” he said. “We had to, and will need to, ask our customers to share the burden because no single company can absorb the whole impact anymore.”

Sharp Corp. said last month that it’s closely monitoring costs before deciding prices for its new electronics goods, while I-O Data Device Inc., which raised prices on its LCD monitors last year, said it will soon do likewise with its network-attached storage products.

Toshiba plans to bring forward investment to expand its semiconductor output to fiscal 2022 from the first half of fiscal 2023, the company said last month. But that alone won’t be enough to overcome the chip shortage completely and the company may further increase its capital expenditure pace if needed, Sato said.

The Tokyo-based company has been through a turbulent year. It’s proposing to split into two companies to unlock value, a plan that has been criticized by activist investors. Sato said the move would make his business unit more nimble and less reliant on approvals from higher up the chain.

“We can speed up the decision-making process by a month or so,” he said.