Toshiba Puts Prized Chips Unit Up for Sale to Sal­vage Busi­ness

The Economic Times - - Around The World -

Tokyo: Af­ter a chaotic day of earn­ings, it’s be­come clearer Toshiba Corp. may soon end up a shadow of its for­mer self. Buried in com­pany pre­sen­ta­tion ma­te­ri­als on Tues­day was a note that the Tokyo-based con­glom­er­ate is con­sid­er­ing sell­ing a ma­jor­ity stake in its mem­ory chip busi­ness, a re­ver­sal of a pre­vi­ous plan to limit the sale to 20%. Then Pres­i­dent Satoshi Tsunakawa took that a step fur­ther, say­ing a sale of the en­tire unit is now pos­si­ble. NAND f l a s h me­mor y, u s e d in smart­phones and solid state disk drives, is one of Toshiba’s few br i g ht sp ot s . Blo omberg In­tel­li­gence es­ti­mates that the en­tire divi­sion could be worth as much as $14 bil­lion, which would more than cover the $ 6.3 bil­lion write­down in the strug­gling nu­clear unit. That would leave Toshiba with few growth prospects, re­ly­ing on pub­lic in­fra­struc­ture projects, el­e­va­tors and a strug­gling con­sumer elec­tron­ics busi­ness. In re­sponse, in­vestors sent the stock down to 10-month lows; one an­a­lyst even sus­pended his rat­ing.

“We’re get­ting to the stage of as­set­strip­ping,” said Amir An­varzadeh, head of Ja­panese eq­uity sales at BGC Part­ners Inc. in Sin­ga­pore. “They’re sell­ing the ma­jor­ity of the chips busi­ness which is the only busi­ness they can sell right now.”

Among po­ten­tial ac­quir­ers for the chip unit, South Korea’s SK Hynix Inc., which is seek­ing to ex­pand its share of the global mo­bile and smart de­vices mar­ket, al­ready of­fered to buy a stake in the mem­ory divi­sion. Chi­nese chip­mak­ers are also among the other po­ten­tial buy­ers.

Toshiba also said it may pull out of nu­clear plant con­struc­tion and only pro­vide equip­ment and en­gi­neer­ing, which would make it ex­tremely dif­fi­cult to sell nu­clear projects to cus­tomers. All op­tions are on the table for the nu­clear busi­ness, in­clud­ing a pos­si­ble sale of West­ing­house Elec­tric Co., its U.S. nu­clear unit, Tsunakawa said.

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