Toshiba Mulls Chip Business Stake Sale to Western Digital: Report

Toshiba Mulls Chip Business Stake Sale to Western Digital: Report

Toshiba Mulls Chip Business Stake Sale to Western Digital: Report

Toshiba Corp is looking to spin off its semiconductor business assets and sell a roughly 20 percent stake in the unit to Western Digital Corp for up to $2.7 billion (roughly Rs. 18,341 crores), the Nikkei business daily reported on Wednesday.

Some US investment funds are also showing interest in Toshiba’s semiconductor business, the Nikkei reported, citing sources familiar with the matter.

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Toshiba said in a statement that it had been considering various options for its memory business, including a spin-off, but that nothing concrete had been decided. The chips unit generates most of the conglomerate’s operating profit.

California-based data storage company Western Digital did not immediately respond to requests for comment.

The Nikkei said one proposal calls for Toshiba to sell about a fifth in the chip business for about JPY 200 billion – JPY 300 billion (roughly Rs. 12,017 crores – Rs. 18,024 crores) while retaining a majority stake. The new chip company will be created as early as the first half of this year, the daily said.

Toshiba shares opened up 3.7 percent in Tokyo, outperforming the benchmark Nikkei average, which was roughly flat.

Toshiba and Western Digital jointly operate a flash memory plant in the city of Yokkaichi in Mie prefecture.

The Tokyo-based conglomerate, which is still recovering from a $1.3 billion accounting scandal in 2015, reported net sales of JPY 1.58 trillion from its semiconductor business for the fiscal year ended March 31, 2016.

In December, a source in the semiconductor industry told Reuters that Toshiba could revive plans to list a slice of the memory chip business, which though highly profitable burns through cash for reinvestment.

Source by¬†gadgets…

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