Does Toshiba Still Make Latop Parts For Repairs

Toshiba is selling off part of its memory business concern

By divesting a portion of the retentiveness business, Toshiba hopes to gain the financial ground to expand

Lucas Mearian Past

Senior Reporter, Computerworld |

Western Digital Toshiba NAND flash fabrication plant — Toshiba

Toshiba on Friday officially announced it volition sell a portion of its flash retentivity business, including the SSD business of the Storage & Electronic Device Solutions Sectionalization, to a not-even so-named buyer.

The company, which invented NAND flash in the early 1980s, announced last week it was exploring spinning off its retention concern. A Nikkei'southward Asian Review said Toshiba had been considering spinning off its semiconductor operations and selling a partial stake to Western Digital (WD), "equally it tries to cope with a massive impairment loss in its U.S. nuclear power unit."

Toshiba, all the same, said Friday it has non confirmed a auction to WD.

Toshiba BiCS 3D NAND flash — Based on a vertical stacking or 3D applied science that Toshiba calls BiCS (Chip Cost Scaling), the visitor'due south NAND flash memory stores 2 bits of data per transistor, meaning information technology'southward a multi-level cell (MLC) flash chip. It can store 128Gbits (16GB) per bit.

Toshiba said it is giving "full and conscientious" consideration regarding the avails to be transferred in the visitor split, so every bit to "non interfere with the operation of the Retentiveness concern" subsequently the transaction is consummate.

The move to spin off its memory business organization is designed to help it grow through investments a partner could make, the visitor told investors.

Toshiba and WD already co-operate memory fabrication plants, such every bit the Fab 2 plant located in Yokkaichi, Japan.

Western Digital Toshiba NAND flash Fab — Toshiba's and Western Digitals Fab ii NAND wink manufacturing facility in Yokkaichi, Nihon.

Toshiba's solvency and fundraising ability are presently in uncertainty because of a $1.nine billion accounting scandal and a huge loss related to the nuclear plant purchase. Last week, Toshiba appear its share price had tumbled 13% after reports that its nuclear power business had lost $four.4 billion.

"Its financial issues were a major drag on the growth of its retentivity business," said Sean Yang, inquiry director of DRAMeXchange.

The Nikkei Asian Review reported that Toshiba may sell a 20% stake in the memory business organization for betwixt $i.77 billion and $2.65 billion, "while retaining a majority stake and keeping the new company in group earnings."

"Toshiba has positioned the retention business every bit a focus business organisation where timely investments, accelerated evolution fourth dimension and the ability to ramp-upwardly the production of large capacity, highly reliable 3D retention devices (BiCS wink) are essential to run across growing demand for storage," Toshiba said in a shareholder memo. "Splitting off the memory concern into a single business organisation entity will afford it greater flexibility in rapid decision-making and enhance financing options, which will lead to further growth of the concern and maximize the corporate value of Toshiba Grouping."

Toshiba plans to hold a special shareholders meeting to vote on the intended carve up in March; if all goes well, the company plans to finalize the bargain March 31.

"Although there are notwithstanding many undecided items, such as the assets to be transferred, which are still under review, and while the company is still considering various structures with a view to an injection of third-party capital...the visitor recognizes that some lead-time is required to fix for the [coming together]," Toshiba said.

Currently, Toshiba and WD together represent 35% of global NAND flash production, according to DRAMeXchange, a division of TrendForce. The leading supplier of NAND flash, Samsung, has a slightly larger share of 36%, while Micron-Intel and SK Hynix account for 17% and 12%, respectively.

Samsung, SK Hynix and Micron are also the three peak DRAM suppliers, so their roadmaps for memory products as a whole are much more developed, DRAMeXchange said. By dissimilarity, Toshiba and WD are limited to just the NAND wink industry.

DRAMeXchange said Toshiba's determination to spin off its retentiveness business organisation volition give it more than operational flexibility and stronger fundraising power.

"For Toshiba and Western Digital, the majuscule-intensive nature of the memory industry and the volatility of the end market will make their operational challenges more difficult compared with similar issues encountered past their rivals," DRAMeXchange stated.

In the long run the current Toshiba-Western Digital alliance volition enable an expansion in NAND Flash production capacity and increased efficiency in storage product development, according to DRAMeXchange.

Toshiba Western Digital NAND flash fabrication plant — The clean room in Toshiba's and Western Digital's jointly operated retentiveness fabrication establish in Yokkaichi, Japan

"Toshiba wants to put its memory concern in a more than stable financial position," Yang said. "Facing mounting operational and competitive pressure, the spun-off entity will be more than constructive in raising greenbacks to stay adrift or expand."

From the financial angle, Toshiba'south latest fiscal quarterly report shows that memory sales roughly made up around 15% of the company's quarterly revenue. However, upwards to fifty% of the company's operating margin for the menstruum came from the same source, which means memory has become the chief profit commuter for Toshiba, DRAMeXchange noted.

"The spin-off bargain therefore intends to make fundraising less difficult for Toshiba's retentivity business, which will need a steady stream of majuscule to develop and compete in the retentiveness industry," Yang noted. "As a carve up entity, the memory business organization volition be in a better position to brand significant changes to its performance and cost construction, making it more attractive to investors. At the same fourth dimension, Toshiba's move bolsters its NAND wink partnership with Western Digital."

Senior Reporter Lucas Mearian covers Windows, Future of Work bug, mobile, Apple in the enterprise, and healthcare It.