As it looks to recuperate from the losses to its nuclear power business, Toshiba has announced its plans to sell off its memory semiconductor business.
Toshiba To Sell Chip Business
According to The Register, the Japanese electronics giant Toshiba announced on Friday, Jan. 27, that it wants to sell off its flash chips and SSD divisions of its storage and electronic devices solutions company. The transaction will be finalized by Mar. 31 of this year. The company will keep the imaging sensors branch.
The electronic and storage devices division accounted for roughly $6.9 billion in net sales, according to Toshiba's latest quarterly report. The sale of the chip business will be part of company's effort to compensate for the expected losses when writing off an acquisition deal for construction company CB&I Stone & Webster. As part of Toshiba's push into the nuclear power space, in the year 2015, Toshiba's Westinghouse Electric Company subsidiary entered into a deal to acquire the construction company specialized in nuclear power projects.
There were reports late last year that the deal had fallen through. As consequence, Toshiba is expected to lose billions of dollars. In order to compensate for that write-off, the company will be forced to shed the memory chip company that is one of its more valuable assets.
Reasons For Toshiba's Decision
Toshiba explained its decision by stating that Toshiba Group needs to enhance its financial structure through various capital measures that are taken into consideration. As a financial measure, the company is considering an injection of third-party capital in this company split. The details of the transaction are expected to be finalized by late February.
According to Computerworld, the company that invented NAND flash in the early 1980s had been considering selling off a partial stake in its semiconductor operations to Western Digital (WD). The two companies already co-operate memory fabrication plants, such as the manufacturing facility located in Yokkaichi, Japan.