Toshiba Plans To Spin Off Storage Business, Sell 20% Of New Company

Subject: General Tech, Storage | January 29, 2017 - 05:09 PM |
Tagged: toshiba, nand, flash storage, flash memory, business

ZDNet is reporting that Toshiba is in a bit of a financial bind following losses from acquisitions and its Westinghouse division -- which saw massive losses and cost overruns in the US Nuclear market -- which could amount to billions of dollars. In an effort to offset some of those losses and preserve shareholder equity, Toshiba plans to spin off its memory business into a new company and then offer up to a 20% stake in that new company for sale. The new company would include its memory chip and SSD business though its image sensor division would stay with Toshiba and not be part of the spin off.

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Toshiba is the second largest memory manufacturer behind Samsung and it is one of the company's most profitable divisions making up the majority of its operating profit.

The company is hoping that other companies or investors will be interested in a piece of that business and that the company will be able to raise enough money from the sale of up to 20% of the spin off company to make up for the losses incurred in its US nuclear market ventures.

Toshiba plans to hold a shareholder meeting in March to seek approval for the plan stating that if it us unable to proceed with the plan and complete a sale to bring in cash by the end of its fiscal year (the end of March), “shareholder equity could be wiped out.”

It is interesting that Toshiba is once again having a bit of corporate drama and needing to restructure (it sold off its PC division in 2015). This could be a good opportunity for one of the smaller memory makers or even one of the spinning rust manufacturers to become more relevant in the flash storage space (and if having a stake got them access to IP for their own stuff even better though that would probably cost them a ton more!). Alternatively, the stake could be bought up by an a large company that just wants a profit machine to grow even larger (heh).

Hopefully the guys will discuss this bit of news on the podcast! What are your thoughts?

Source: ZDNet

January 29, 2017 | 06:19 PM - Posted by Anonymous (not verified)

Small Typo: second paragraph after picture.

"merket"

Not too familiar with Toshiba's enterprise memory, storage things, but on the consumer side the last thing I remember liking as a consumer was their 3TB disk drives.As WD grew out to huge sized drives now things have gotten quite from Toshiba.Unless I'm missing something big they unveiled at CES?

As with all the companies kind of sucks Samsung's blows almost everything out of the water. idk is it a matter of more R &D? I think Alan covered this at one point in a past podcast.

January 29, 2017 | 06:23 PM - Posted by Anonymous (not verified)

"As with all the companies kind of sucks"

should have wrote:

As with many companies, it kind of sucks..."

January 29, 2017 | 09:39 PM - Posted by Tim Verry

Thanks, Google Docs didn't catch that for some reason heh.

Yeah Toshiba has been pretty quiet on the consumer SSD front, but their memory chips are in a lot of other stuff. Samsung does have a lot of engineering muscle and money to pour into R&D and since they also manufacture the memory chips and have the clout to get controller chips produced at volume, they can really leverage their size to get production costs low. It does seem like there is not much competition and variety with controllers like their used to be...

January 30, 2017 | 06:38 AM - Posted by Master Chen (not verified)

And then some people out there still dare to ask why DRAM prices spiked insanely in the last 6 months. Toshiba and Seagate are the only main culprits.

January 30, 2017 | 09:37 AM - Posted by Anonymous (not verified)

DRAM prices have always done this. Bottom out prices then spike when a new technological format pushes through. Rinse and repeat. Historically, this is nothing new. wait a couple years and we will see 8GB kits (or 16GB given progression) bottom out under $50 again.

January 30, 2017 | 11:42 AM - Posted by Anonymous (not verified)

Bad investments, an accounting scandal, and crappy laptops with the lack of OEM graphics driver support. So long Toshiba your financials are not very glowing!

Hey Toshiba! What's the Half-Life of your crappy lappys!