Toshiba Puts Prized Chips Unit Up for Sale to Salvage Business
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.