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Toshiba plans to sell part of chip business to raise capital

Posted: 01 Dec 2015 ?? ?Print Version ?Bookmark and Share

Keywords:chip business? semiconductor? NAND flash memory?

Toshiba announced last week that it was deliberating on whether or not to sell a minority stake in its semiconductor business as a way of raising the company's capital amidst an accounting scandal.

The business Toshiba considers selling is responsible for manufacturing memory chips used by Apple and other smartphone makers in their products. It is also the main revenue source of the Japanese company as its PC, consumer electronics and nuclear operations face declining profits.

Observers say there is a deal to be done between Toshiba and China's state-controlled Tsinghua Unigroup, which has made an unsuccessful informal bid of $23 billion to buy U.S. memory maker Micron Technology, and reportedly was rejected by South Korea's SK Hynix after offering to buy a 20-per cent stake in the company for about $5.3 billion.

Toshiba CEO Masashi Muromachi said at a news conference that while it was examining assets sales would keep control of semiconductor operations, as it is a core business for Toshiba, according to a Wall Street Journal report.

A Reuters report of the press conference said the core business remark applied to the NAND flash memory business and inferred that the digital logic business, called system LSI in Japan, and discrete chips as being, potentially, up for sale.

Toshiba's ability to raise capital has been hampered since it confessed earlier this year to having mis-stated its accounts for a number of years previously while its need to restructure is more acute.

In October the company said it would withdraw from white LED production by the end of March 2016 and that it had agreed to sell its image sensor business to Sony for approximately $165 million. Toshiba has also seen its financing partner for flash memory, SanDisk being sold to Western Digital for about $19 billion.

- Peter Clarke
??EE Times Europe

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