Toshiba Shareholders Agree to Sell NAND Flash Memory Unit
Bohs Hansen / 1 year ago
Most of us know Toshiba as a hardware manufacturer with products from mechanical and flash-based storage over notebooks and all the way to smart TVs, but the company is a lot bigger than that. They are also a huge player in the international Nuclear business, or maybe we should say that they were a big player. In the wake of Westinghouse Electric filling for bankruptcy on Wednesday, angry Toshiba shareholders have voted to sell off the NAND flash memory unit in order to cover some of the losses.
If you are from the US and have watched the news lately, then you most likely know all about Westinghouse Electric and their trouble. If you live outside, there’s an equal chance for the opposite, that you never heard of them. Westinghouse Electric was hit by billions of dollars of cost overruns at four nuclear reactors under construction in the U.S. Southeast. The bankruptcy casts doubt on the future of the first new U.S. nuclear power plants in three decades, which were scheduled to begin producing power as soon as this week, but are now years behind schedule. For Toshiba, the filing will help keep the crisis-hit parent company afloat, but it won’t be enough. It is however enough to keep it afloat while they line up buyers for their memory chip business.
The sale of the NAND Flash Memory unit could fetch Toshiba as much as $18 billion while it’s said that Toshiba’s Westinghouse-related liabilities totalled at $9.8 billion as of December. A day after the bankruptcy filing of Westinghouse Electric, an extraordinary general meeting saw angry shareholders vent at CEO Satoshi Tsunakawa. One of the reasons for this was that Toshiba had described the chip and nuclear businesses as core units and main pillars in the conglomerate last year. But what once was a pillar, turned into a hole and shareholders let the company know what they feel about the situation.
“How can something that was supposed to be a pillar turn into a hole,” said a shareholder, asking Tsunakawa about the company’s nuclear business.
“Toshiba has become a laughingstock around the world. You have no clue what’s going on,” shouted another.
Initial bids for the sale closed on Wednesday and there are many interested parties. A source with knowledge of the planned sale said that about 10 potential bidders are interested. Those suitors include Western Digital Corp which operates a chip plant with Toshiba in Japan, Micron Technology Inc, South Korean chipmaker SK Hynix Inc, and financial investors. The government-backed Innovation Network Corporation of Japan and Development Bank of Japan are expected to enter later bidding rounds as part of a consortium.
Another source has been cited of saying that Foxconn is expected to place an offer too, which might end up being the highest bid. However, this might be blocked by the Japanese government due to Foxconn’s deep ties with China.