Toshiba’s New R&D Operation in Vietnam to Develop Embedded Software for Digital Consumer Products

TOKYO--Toshiba today announced that it has established a new R&D center in Hanoi, Vietnam, with the mission of enhancing the embedded software integrated into digital consumer products.

Toshiba Software Development (Vietnam) Co., Ltd., a wholly owned subsidiary of Toshiba Corporation, will be positioned as the core overseas development center for embedded software and will start operation in June this year. The initial staff will be of some 20 people and Toshiba expects the company to have some 300 employees by FY2010.

The main responsibility of the new center will be development of lower processes and functions to integrate into upper processes developed in Japan, with the goal of expanding the capabilities and functionality of digital consumer products and handsets. Locally hired engineers will be given extensive training in Toshiba’s original development process, a move that is also expected to reduce the risk of compromising know-how comprise though outsourcing.

The increasing pace of inward direct investment in Vietnam, including investment by Japanese companies, is driving growth in the Vietnamese IT sector. The availability of skilled personnel and a cost edge makes the country an attractive option for software development for companies like Toshiba. In addition to this, Toshiba is seeking to expand its software R&D over the medium term, and to do so without concentrating activities in a single country or location. For these reasons, the company decided to establish a new R&D operation in Vietnam, to complement those it has already set up in India and China.

Toshiba has long standing relations with Vietnam, including scholarships to Vietnam National University, an education institution under the direct jurisdiction of Vietnam’s prime minister, and Hanoi University, one of Vietnam’s leading engineering universities. Toshiba will seek to further enhance its partnership with these universities and to secure excellent human resources.

BACKGROUND
Digital consumer products are increasingly high tech, with more and more of them offering software-based key functions. The trend is toward development of highly functional software, while increasing competition drives a need to win cost reductions. In response, under its mid-term business plan, Toshiba is expanding both the number of R&D engineers it employees, and it network of overseas bases. In line with this policy, the company decided to establish a new center in Vietnam for the following reasons.

1. The IT business is a growth business, and there are complementary companies entering Vietnam. Excellent human resources are available.
2. R&D costs and personnel costs are lower, as the cost of living is lower than in Japan.
3. The number of Japanese speakers is increasing, and Toshiba expects to promote Japanese communication at the new company through language training.
4. Selection of Vietnam dilutes concentration of software development resources in a few advanced countries.

Overview of new office
Name: Toshiba Software Development (Vietnam) Co., Ltd.
Capitalization: 500 thousand dollars (around 60 million yen)
Location: Hanoi
Number of employee: Around 20 people initially, expected to expand to around 300 people by FY2010
Scope of Business: R&D of embedded software (initially lower processes and expanding in due course)

Description of Business: Repair, upgrade and consulting services of turbines and generators for thermal and hydro power plants, and project management services for orders received, etc.