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Japan's biggest chipmaker Toshiba said it expected its annual operating profit to rise by 25 per cent, roughly in line with market expectations, but that outlook could be in jeopardy if potential power outages threaten its mainstay flash memory chips.

Toshiba rushed to secure key supplies following the March 11th quake and tsunami and is eyeing normalised production by the second half of this financial year to win back clients planning to reduce dependence on Toshiba chips.

But now, prime minister Naoto Kan's call to shut down Chubu Electric's Hamaoka plant could disrupt production at Toshiba's key Yokkaichi plant in central Japan.

Japan's first electric light bulb maker expects to earn an operating profit of 300 billion yen ($3.7 billion) in the year to March 2012.

Toshiba's quarterly operating profit was 98.0 billion yen in January-March, which was in line with market expectations after the company pre-announced its earnings last month.

Prior to the quake, Toshiba was hit by a power outage at its Yokkaichi plant on March 8th, which prompted joint venture partner SanDisk Corp to take a $25 million charge at its results announcement last week.

After the quake, which knocked out suppliers and temporarily halted production of Toshiba's mobile displays and chips used in home appliances, SanDisk and major client LG Electronics Inc said they would diversify chip suppliers away from Toshiba.

Prior to today's announcement, Toshiba shares fell 1.4 per cent against a 0.3 per cent fall in Tokyo's electrical machinery subindex.

Its shares since the quake have fallen 11 per cent against a 6 per cent fall in the subindex.

Reuters