The move by Toshiba is aimed at balancing out the supply and demand associated with these chips. The Japanese giant said in a published statement [PDF] that “Oversupply of NAND flash memory in the retail market, for application in USB memories and memory cards, has resulted in continual price declines since the beginning of this year.” The production cut down has taken effect from today itself.

The production will be reduced at its Mie Prefecture plant in Japan. Toshiba is 2nd in NAND manufacturing after Samsung and being the main supplier of Apple, this move is surprising if not shocking. With the highly awaited iPhone 5 just about a month away as per different reports (here and here), one would imagine that Toshiba might want to stock up on these chips.

Toshiba is of the view point that globally the prices of NAND flash memory will be on an upside during the current quarter as many companies are going to launch their new smartphones that would directly increase demand of such chips.