The plants in Mie and Iwate prefectures in central Japan were due to be constructed this year, with production starting sometime in 2010.

Toshiba was not immediately available for comment.

Flash memory chips are used in numerous consumer electronics gadgets such as cell phones, digital cameras and portable music players, but as sales of those devices slow, so does demand for the chips.

The memory chip market has been in a rut for some time with oversupply from the world's chip makers forcing prices down to at or below the actual production cost. A 32GB flash chip currently costs around US$5.20 on the spot market, with 2GB memory cards as cheap as $3.08, according to data from DRAMeXchange.

Toshiba's announcement to construct the new plants was a statement of confidence in the market when it was made last year because it assumed prices would rise by 2010, at which point Toshiba would be able to profit from the new production. But the production glut continued throughout 2008, and with sales of devices like cell phones and digital cameras dropping, the prospects for the market remain weak.