The rating on Toshiba Corp. reflects the company's technological strengths in information and communications equipment and systems, semiconductors, and displays. The rating also reflects a deterioration in Toshiba's earnings base, as well as the company's slightly weak financial profile. Although Toshiba has a diversified business portfolio, the company's earnings base has been eroded by its weakening operating performance in mainstay businesses, such as electronic devices and IT-related equipment, which have faced stagnant demand and strong pricing pressures. In addition, the company has been slow to react to competitive pressures in the global market resulting from improved technological and cost competitiveness among Korean and Taiwanese manufacturers, and from China's emergence as an international production center. Whether the company can achieve a
