Electronics giants shake up supply chain

Toshiba has announced a new supply chain deal which involves outsourcing its production of semiconductors to a rival company.

The electronics giant is restructuring its chip-related operations and is looking to concentrate its resources in other markets.

Analysts believe Toshiba's decision to outsource production is driven by a need to cut costs in the LSI chip market which is dominated by Intel.

LSI chips contain a microprocessor and are at the heart of many consumer electronics devices. The supply chain deal will free up Toshiba to concentrate on building memory chips for smartphones, as well as the LCD displays for Apple's iPhone device.

Both Toshiba and Samsung refused to comment on the value of the supply chain deal, which took effect on January 1st.

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