The new company, to be launched in March, "will enhance strategic planning, speed up decision-making and reinforce business execution in key markets that are enjoying unsurpassed growth rates," Toshiba said in a statement.

The new firm will be designed to better manage semiconductor production, marketing and sales in the greater China markets, which are expected to account for some 40 percent of global semiconductor demand by 2010, it said.

"We have set our goal for the semiconductor business in the region to achieve a sales target of 600 billion yen (5.6 billion dollars) by 2010," Shigeo Koguchi, president of Semiconductor Co., a unit of Toshiba, said in the statement.

The new firm, yet to be named, will be owned 90 percent by Toshiba and 10 percent by Toshiba China Co. Ltd. It will start with eight employees and plans to raise the workforce to about 20 by March 2005.

SPACE.WIRE