Toshiba fell into the red with both sales and income having decreased in the April-June 2008 quarter. Sales declined 2.8% year-on-year (YoY) to ¥1.618719 trillion (approx. US$15 billion), operating income plunged by ¥45 billion to a loss of ¥24.175 billion and net losses reached ¥11.605 billion.

"Our results were very disappointing," Toshiba Corp's Representative Executive Officer Fumio Muraoka said at the beginning of the company's financial results presentation.

Regarding the reason for the sluggish results, Muraoka said, "It's due to nothing other than worsening performance in our Semiconductor business." The Semiconductor business saw sales fall 4% YoY to ¥291.5 billion and operating income worsend by about ¥54 billion to ¥30.2 billion operating loss.

The factors that caused the income decline included lower unit prices, foreign exchange loss due to the stronger yen, stagnant sales of SoC products for digital home appliances and the cost to start its Nagasaki Operations acquired from Sony Corp.

SoC products accounted for slightly more than 70% and memory products constituted the remaining portion of the overall segment loss.

Toshiba maintained operation rates at the same level as in the January-March 2008 quarter at most of its semiconductor plants. But the 300mm wafer-based advanced SoC production line at its Oita Operations dropped from 80% in the preceding quarter to 70%. Demand for SoC chips for TV and audio device applications fell below its expectation, the company said.