January 18, 2017 2:00 am JST
Exclusive

Toshiba seeking investment in chip biz from Western Digital

Japanese company weighing business spinoff

TOKYO -- Toshiba is considering spinning off semiconductor operations and selling a partial stake to Western Digital as it tries to cope with a massive impairment loss in its U.S. nuclear power unit.

The new chip business company will be created as early as the first half of this year. Besides global hard-drive leader Western Digital of the U.S., investment funds are also showing interest, according to sources familiar with the matter.

Which suitor will win out remains unclear in light of antitrust and other considerations. But Toshiba will likely sell a roughly 20% interest for between 200 billion yen and 300 billion yen ($1.77 billion to $2.65 billion) while retaining a majority stake and keeping the new company in group earnings. The unit could consider stock-market listing in the future.

The arrangement would provide Toshiba with short-term funds in the form of proceeds from the stake sale, as well as make it easier for the business to get bank loans and other funding for capital investment and research and development. This would facilitate growth driven by flash memory chips, eventually lifting Toshiba's capital.

Toshiba and Western Digital operate a key flash memory plant together in the Mie Prefecture city of Yokkaichi.

Memory chips accounted for the majority of the 1.57 trillion yen in sales of Toshiba's semiconductor operations in fiscal 2015.

Ahead of the mid-February release of April-December results, Toshiba is scrambling to finalize new restructuring steps and a necessary write-down on the U.S. nuclear business. It hopes to retain financial support from lenders by presenting the spinoff and other reform plans.

(Nikkei)

Toshiba Corp.

Japan

Market(Ticker): TKS(6502)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 11,434M
Shares: 4,237.6M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

Resubscribe now to continue reading.
BEST OFFER:
Only US$ 9.99 per month for a full-year subscription

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.