## Expansion in China, the Growth Market 

Any company looking to the future must give full weight to the significant growth that Chi- na promises in coming years. Toshiba does. The Company is already a well-established presence in China: 37 locally incorporated subsidiaries promote activities across the com- plete range of Toshiba’s businesses and already employ approximately 13,000 people. In the last fiscal year, Toshiba’s sales in China totaled a healthy ¥350 billion and they are expected to rise to at least ¥600 billion by 2005. 

Given these figures, it comes as no surprise that Toshiba considers expansion in China as one of the most important issues for manage- ment, or that the Company is now promoting a series of policies to promote market success and profitability. 

China’s rapid development in recent years has transformed the economy. Once thought of simply as a cost-efficient production base, China is now much more an important market in its own right and a promising development base for products and services. Toshiba’s activi- ties in recent years reflect this evolution. By October 2001, Toshiba China Co. Ltd. was ready to open its own R&D Center, allowing local development of products geared to the Chinese market. 

In April 2002, the Company established a new Customer Service Center to promote a central strategy—the ability to hear the voices of customers, and to reflect their needs and de- sires in products that are brought to market as quickly as possible. This was followed by a se- ries of key moves related to manufacturing. 

## Semiconductor Operations Reinforced 

In July 2002, Toshiba revitalized its semicon- ductor operation in China when it made Wuxi Huazhi Semiconductor Co., Ltd. a wholly owned subsidiary, buying out the interest of its joint-venture partner, Huajing Electronics Group Corp. This was only Toshiba’s first step in a radical makeover. Renamed Toshiba Semi- conductor (Wuxi) Co., Ltd., the company received additional funds to raise its capital to U.S. $15 million and moved to a new produc- tion facility, where a two-year, ¥5 billion investment program will raise production ten- fold while extending it from bipolar and Bi-CMOS ICs into discrete devices. 

There were sound reasons for the move. While China accounted for only 11% of the world semiconductor market in 2002, that fig- ure is expected to climb to as high as 20% by 2010. The new company gives Toshiba a cost- efficient production base that will support early delivery of products that meet the needs of customers in China. 

## Manufacturing Portable PCs for the Global Market 

Toshiba Information Equipment (Hangzhou) Co., Ltd. became the first company to start operations at the new Hangzhou site. Toshiba was developing to serve global markets, when it began production of portable PCs in April 2003. In its first year of operation, the new fa- cility will manufacture approximately 750,000 PCs with annual output expected to rise to 2,000,000 units in the near future. Over time, the new company will cultivate development and design capabilities, and also provide sup- 

