Toshiba Corp may turn its first annual profit on liquid crystal display (LCD) panels in four years as sales of smartphones and tablet computers boom, the company's CEO said in an interview on Thursday.

Norio Sasaki also told Reuters he expected demand for NAND flash memory chips to be stronger in the January-March quarter than in the current quarter ending this month. NAND is used in various electronics products including Apple Inc's iPhone.

If all goes well, it's possible we could see profit in three figures this year, Sasaki said of the LCD unit, implying at least 10 billion yen ($119 million) in the Japanese counting system, topping the company's forecast for break even.

Sasaki, a 61-year-old former engineer, took the helm 18 months ago. He has vowed to sharpen the focus of the sprawling conglomerate and taken a hard line on costs across businesses from nuclear power stations to home appliances.

Toshiba's profits for the first half of this year were the best in a decade, but it kept its full-year outlook unchanged. Profits at rival Samsung Electronics fell from a record high in the most recent quarter as the company warned of falling demand for LCDs and chips.

Sasaki said he would be cautious about big investments in the volatile LCD sector. Earlier this week Toshiba denied a media report it was planning to spend about 100 billion yen on a new plant in Japan, mainly to supply Apple. The report said Apple would invest in the plant.

Nothing is decided on further investment amid the current volatility, although the demand is there, Sasaki said. Profits would rise quickly. But when they stop rising, you have to make sure you don't fall into the red.

NAND DEMAND

One U.S. analyst said this week that Apple's demand for NAND could double next year and some estimate Apple already consumes about a third of global supply.

If they can get a commitment from a key customer to build that fab, then it could be a fairly lucrative business, given the strong demand growth in smartphones, said Damian Thong, senior technology analyst at Macquarie Securities in Tokyo.

Sasaki said that the effect on NAND shipments of a brief cut in power to the company's Yokkaichi plant in central Japan on December 8 would not become clear until at least the new year. The outage forced it to halt operations at the plant until December 10.

Toshiba, the world's second largest supplier of NAND chips after South Korea's Samsung, had previously said shipments could fall by up to 20 percent in January and February.

The effect on Toshiba's profits is also unclear, because the factory stoppage is likely to boost prices, Sasaki said. Toshiba is building a fifth NAND facility at Yokkaichi that is expected to be complete in spring of next year, but he declined comment on when it would start production.

Shares of Toshiba have fallen about 10 percent since the start of the financial year in April. By contrast, Samsung shares have risen nearly 8 percent in the same period.

Sasaki has said he wants to raise return on investment (ROI) to 20 percent by 2012, a leap from current levels of about 10 percent that analysts say will be difficult, but not impossible, to achieve.

They have hived off quite a few unprofitable businesses, and there will be a contribution from the very profitable NAND business, said Takao Hattori, an analyst at research firm T.I.W. I think it is a possibility.

Separately, Toshiba announced on Thursday that it would open an LCD TV manufacturing joint venture in Egypt next year, in an effort to take advantage of an expected rise in demand in the Middle East and Africa.

(Additional reporting by Arada Kultawanich; Editing by Nathan Layne and Chris Gallagher)

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