However analysts like Yuichi Ishida, of Mizuho Investors Securities, point out that it's daft to spend billions to make 28nm chips if you can outsource them. Ishida expects Toshiba to out-source all its 28nm production.
If Ishida is right, then Toshiba is going fab-lite after the 40nm generation. And fab-lite is a euphemism for 'going fabless'.
If you're not going to build a next-generation fab, then you'll never build another leading-edge fab, and you're on your way to fablessness.
It seems unimaginable that Toshiba, which had the world's leading CMOS process in the 1980s, should now be considering giving up leading edge manufacturing, but it makes sense.
From an annual capex of over $3 billion for the last three years, Toshiba's capex has been cut to under $1 billion this year. And you can't build a leading edge fab for $1 billion or even for $2 billion.
AMD, Freescale, Philips, Infineon, NEC, Fujitsu, LSI Logic and many others have already taken the fab-lite to fabless route.
But no company which is primarily a memory company has ever gone fabless.
So Toshiba has to make the choice: Does it stay in memory and build new fabs? Or does it become an SOC player and go fabless?
Toshiba's new CEO, Norio Sasaki, said last June he may give the go-ahead to the building of two 28nm NAND flash plants which had been postponed. He said it would depend on market conditions. And the NAND price is hardening.
But after losing $2.8 billion in the NAND market last year, and having to raise $5 billion of fresh funding in the debt and equity markets, Sasaki will be demonstrating real courage if he decides to build the fabs.
Sometimes, when you see the choices they have to make, you simply don't envy these CEOs.