Reseller News

Who’s lining up to buy Toshiba’s semiconductor business?

Western Digital, Foxconn Technology Group and Kingston Technology are among those who could be in the running

Western Digital, Foxconn Technology Group and Kingston Technology are among at least 10 potential bidders lining up for a chance to take on Toshiba’s memory chip business, according to reports.

In addition to several of Toshiba’s fellow semiconductor makers, a number of investment funds are also among the organisations interested in potentially acquiring the embattled Japanese tech company’s memory chip division, Bloomberg reported on 17 March.

Blooberg said that the bids could range from between 700 billion yen (US$6.2 billion) to 1.8 trillion yen ($15.9 billion), according to sources familiar with the matter.

The identities of some of the potential bidders emerge just days after Toshiba told shareholders that it could be de-listed from at least two stock exchanges if it is deemed to have not improved its internal management system since its last review late last year.

The company said on 14 March that the two stock exchanges on which it is listed, the Tokyo Stock Exchange (TSE) and the Nagoya Stock Exchange (NSE), will review a fresh submission on its internal management system and, if it has not improved since its prior submission, the company’s stock will be de-listed.

Toshiba’s efforts to remain active on the two stock exchanges follow revelations late last year that the company is facing a write-down that could impact the business to the tune of billions thanks to cost overruns at Westinghouse Electric Company, the US-based nuclear plant construction business that Toshiba acquired in 2015.

In late December last year, Toshiba indicated the resulting goodwill impact from the acquisition could “reach a level of several 100 billion yen or several billion US dollars” – far outstripping the $US87 million in goodwill it initially predicted upon the purchase.

The resulting fallout from the write-down revelation has subsequently seen Toshiba request, and be granted, two extensions to its third quarter securities report submission deadline.

In January, the company revealed it would sell a portion of its flash memory business, including the SSD business of the Storage & Electronic Device Solutions Division, to Western Digital (WD). Later, it was reported that the company may sell off more of its flash memory spin-off to cover losses incurred by the Westinghouse Electric Company.

Now, with its memory chip business up for grabs, Toshiba could be in for a big windfall. According to Bloomberg, the semiconductor business made up about 25 per cent of the company’s revenue in the latest financial year.