UPDATE 1-Toshiba to close some chip production units - Nikkei

June 12 (Reuters) - Japan's Toshiba Corp (6502.T) said it would shut some of its chip production units and annulled a recently announced spin-off, in a bid to revamp its loss-laden chip operations, the Nikkei business daily reported.

The company plans to close two production lines at its Kitakyushu plant and to halve output capacity for 150mm-diameter wafers at its Iwate Toshiba Electronics Co unit, the Nikkei reported.

Temporary workers would be reduced at the production bases, while some full-time employees could be reassigned to non-chip operations, the report said.

The company, which plans to reduce its production capacity for 150mm or smaller wafers by 30 percent, expects total restructuring expenses from the disposal of facilities and other measures of 30 billion yen.

By overhauling its loss-laden chip operations, the company aims to cut fixed costs by around 100 billion yen ($1.02 billion) for the year ending March 31, 2010.

Toshiba's chip operations incurred an operating loss of about 280 billion yen for the year ended March 31, due to a steep fall in memory and system chip prices.

Toshiba is the world's second-largest maker of NAND-type flash memory chips after South Korea's Samsung Electronics (005930.KS). ($1=97.80 Yen) (Reporting by Mansi Dutta in Bangalore; Editing by Gopakumar Warrier)