*Toshiba 2009-12 capex down 33 pct vs previous 3 years
*Infrastructure to earn double profit vs devices 2011/12
*Sees 2010/11 operating profit Y250 bln vs prior view Y500 bln
*Will stick to 60 pct cut in semiconductor capex in 2009/10
*Toshiba shares -3.6 pct, Tokyo elec mach index -1.9 pct (Adds analyst comment, details, recasts throughout)
By Mayumi Negishi
TOKYO, Aug 5 (Reuters) - Japan's Toshiba Corp said that profit from its power and infrastructure business would be double that from its devices in three years, as its chip capex slows and it seeks growth in nuclear power and smart grids.
Japan's biggest chipmaker is reining in the pace of its chip spending and is hunting for stable revenue in areas such as healthcare and water treatment, after logging three straight quarters of operating losses on its semiconductors.
Toshiba said it expected its electronic devices, made up of its microchips, sensors and LCDs, to earn about 100 billion yen ($1 billion) in the year ending in March 2012, compared with about 200 billion yen in its social infrastructure business.
"Our results last year were horrendous," new Toshiba President Norio Sasaki told a news conference. "We aim to build a stable revenue base that will not be affected by fluctuations in the economy."
Price slides are slowing in a chip sector just emerging from its worst downturn, prompting sector leaders Samsung Electronics Co and Intel Corp to look at investing in new technologies to widen their lead.
But Toshiba, the world's No.2 maker of NAND chips after Samsung and the world's biggest maker of discrete chips, aims to cut its capital spending in semiconductors by 60 percent this year.
While the company says it will continue to invest in technologies to make smaller and more powerful chips, that might not be enough to keep pace with more aggressive rivals, say some analysts and investors.
"A cyclical upturn is bound to come in the microchip market," said Ichiyoshi Investment Management chief fund manager Mitsushige Akino.
"What's important for Toshiba is whether it is determined to take advantage of that recovery through aggressive investment, while carrying out overall cost reductions."
SMALLER SCALE
Toshiba now expects an operating profit of 250 billion yen next year, half the 500 billion yen it forecast in May 2008, as it readjusts its business plan to match a harsher business climate.
The owner of U.S. nuclear power firm Westinghouse now expects capital spending of 1.1 trillion yen in the three years to March 2012, sharply down from the 1.6 trillion yen it spent in the three years to March 2008, excluding its Westinghouse buy.
Toshiba had invested heavily in NAND flash memory, used in electronics gadgets such as Apple Inc's iPhone, to keep pace with Samsung and Hynix Semiconductor Inc.
But mounting losses weighed on its capital, forcing it to raise $5 billion in May and leading to the replacement of former president Atsutoshi Nishida with Sasaki.
Toshiba says it will now focus spending on shrinking chips, shifting to bigger wafers and lowering defects, rather than solely on boosting production capacity. It will also consider outsourcing even its top-line system chips as part of its goal to cut 300 billion yen in costs.
It now aims to boost its operating profit to 350 billion yen in the year ending in March 2012, up from a target for 100 billion yen profit this year -- above consensus -- and expand in areas such as hard drives, CT scans, water and sewage treatment, smart grids and rechargeable batteries.
Toshiba's loss-making LCD unit Toshiba Mobile Display Co also said on Wednesday it will take a near-20 percent stake in a joint venture in China to tap growing demand for mobile phone displays and offload equipment as it shifts its focus in Japan to high-resolution products. ($1=95.04 Yen) (Reporting by Mayumi Negishi and Kiyoshi Takenaka; Editing by Hugh Lawson)