Toshiba will be spinning off their NAND Production business

Toshiba will be spinning off their NAND Production buisness

Toshiba are rumoured to be spinning off their NAND Production

Toshiba will be spinning off their NAND Production business

 

Toshiba has confirmed that they will spin off their NAND production division into a separate company, creating a dedicated NAND producer that will allow Toshiba to refinance itself through external investment. 

This move is likely due to Toshiba's recent financial difficulties, which have been due to the miscalculation of debt and misstating over $1.2 billion dollars of earnings, which has placed Toshiba into a lot of hot water.  
 

At this time it is unknown if or when Toshiba will create their new external NAND production company, though it is likely that it will see investment from Western Digital, who recently acquired Sandisk. Toshiba has recently been a major partner of Sandisk, who co-created their BiCS3 64-layer 3D NAND Flash, which is set to be a major earner for both companies moving forward.

Western Digital is in great financial heath at the moment and has expressed a lot of interest in furthering its stake in the NAND flash market, making it likely that the company would invest heavily in Toshiba's NAND Semiconductor spin-off. After the spin-off, Toshiba can sell a partial stake in the new company (around 20%) to another company to generate some short-term income, though this will come at the cost of future profits from their NAND business.  

Toshiba has stated that they want to complete this transition by the end of this quarter, which means that we should be hearing a lot more about this before the end of March. 

Toshiba are rumoured to be spinning off their NAND Production

Western Digital is the most likely buyer for any stake in this Toshiba spin-off, especially given their ownership of Sandisk, who will be a major production partner of the new company. 

This raises the question of what the future will hold for Toshiba, as their NAND sales currently account for 80% of their operating profit, which raises several questions as to how they plan to make their own profits moving forward if they spin off their NAND division.  

Toshiba will no doubt retain a majority share in their new NAND producing spin-off, though it will certainly reduce their future income from the division, as profits will need to be shared with their partners. This move will help Toshiba stay afloat in the short term, though it presents a lot of long-term risks for the company.   

 

You can join the discussion on Toshiba spinning off their NAND production business on the OC3D Forums.

 

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27-01-2017, 12:15:26

NeverBackDown
How does one miscalculate 1.2 billion $?Quote
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