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Toshiba lets go of consumer biz amid reorg plan

Posted: 23 Dec 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Toshiba? reorganisation? PC? notebook? IDC?

"We used to expect companies to sell three laptops per household, now we expect more like one or two," said Linn Huang, research director of mobile devices and displays at IDC. In emerging markets, "more families are getting low-cost smartphones as their primary Internet device and may never move up to PCs," he said.

IDC pegs notebook compound growth at just one per cent from 2014-2019. This year it is expected to dip to sales of 163 million systems, down from 170 million last year in an "abysmal year for PCs overall," Huang said.

Flash still strong despite oversupply

In semiconductors, Toshiba's second biggest division by revenue, the company expects sales will slump nine per cent.

Earlier this month, Toshiba exited the white LED market and sold off its image sensor business including an Oita, Japan, plant to Sony. However it is expected to hang on to its NAND flash business where the group, pegged as second behind Samsung, is expected to report nearly $1.08 billion in profit this year, despite a market in oversupply.

"I've seen amazing price declines as low as 128GB white box SSDs sold to OEMs for less than $40" and 256GB SSDs only commanding an additional $20, said Alan Niebel, lead analyst at Web-Feet Research.

Flash is Toshiba's most profitable chip business

Flash is Toshiba's largest, most profitable chip business. (figures in billions of yen)

"The outlook is not dire," he said, noting an expected uptick in PC sales and growth in SSDs from business users and car makers.

Among the positive notes, Toshiba has recently started shipping 3D NAND chips. In addition, the acquisition in October of rival SanDisk by hard-disk giant Western Digital should "open opportunities for Toshiba to have more flexibility, diversify, find new partners and focus more the enterprise," Niebel said.

Flash has been a "cash cow" for Toshiba and "the reorg doesn't impact their flash business," he added.

Overall Toshiba ranks eight among semiconductor vendors by IC Insights at $11 billion in 2014 sales falling to a forecasted $9.7 billion this year. The new combination of Freescale and NXP with combined revenues slightly over $10 billion technically will leapfrog the Japan giant this year

The Avago/Broadcom combination likely will leapfrog both companies when it is complete on February 1 with $16 billion in combined revenues. Toshiba is the last remaining company from Japan among the world's top ten chip makers.

- Rick Merritt
??EE Times


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