Toshiba Wants Out of the Chip-Making Business, and Fast

Electronics giant Toshiba Corp is looking to sell off a major chunk of its memory chip business, and may eventually look to spin off the unit as a public company. The company said Friday that it is currently seeking an investor to acquire a less than 20 percent stake in the unit as it seeks to offset losses incurred from a multi-billion dollar write-down in its U.S. nuclear business.

According to reports, the company is hoping the stake sale will generate as much as $1.7 billion for the company. But the stake sale may be only the beginning, as Toshiba may eventually seek to either sell the unit off entirely or take it public.

Major Shakeup for the NAND Market

The move is likely to significantly shake up the memory chip sector. Toshiba is the second-largest producer of NAND flash memory after Samsung electronics, and the unit generates the majority of the company?EU?s overall profits.

The division could prove attractive to a number of strategic and financial buyers, thanks to its role in producing the microchips that power everything from smartphones to digital cameras. Foxconn, for example, is reported to be interested in acquiring microchip production assets to build up its display business.

Western Digital may be another natural acquirer for the stake, given that it already operates a NAND plant with Toshiba in Japan. Canon, another Japanese company that uses Toshiba?EU?s chips in its digital cameras, has already expressed interest in the stake. Canon also acquired a medical device unit that Toshiba sold in 2015, and that history may help grease the wheels for a second purchase.

Not Much Time To Sell

But while Toshiba said it values the unit at anywhere from $9 billion to $13 billion, it may have trouble obtaining the price it wants, given the timing of…
Source: Mobile Tech Today

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