Toshiba Corp. is a Japanese company that managed to build for itself ramifications in a large range of markets such as information technology, electronic components, power systems, consumer electronics, medical equipment, logistics, and others. Due to this impressive multilateral performance, the company managed to become the seventh largest semiconductor maker based on revenue. However, the integrity of the organization is put in jeopardy by a future bid. Some of its own main competitors will try to buy a stake in Toshiba’s flash memory.
SK Hynix is Toshiba’s greatest rival which was named the fifth largest semiconductor maker and the second-largest memory chipmaker after Samsung Electronics. This South Korean company together with other such peers like Micron Technology Inc will participate in a future bid for a part of Toshiba’s flash memory business. This is a great opportunity for large players in this industry to gain an advantage over the others by boosting the NAND.
Toshiba was urged to put part of its business under a future bid due to financial constraints. The U.S. nuclear power business will force the company to pay a multi-billion dollar writedown by the month of March. The company’s strategy is to gather funds by that date. Otherwise it may not survive the impact.
Nonetheless, Toshiba Corp. prefers to have private equity bidders such as Bain Capital instead of its rivals so as not to lose its market influence. The stake in its chip business might open its rivals the door with ease to an innovative way to gain a market advantage regarding the NAND flash memory chips. This is a new non-volatile technology for data storage that can easily compete with hard disks.
On Tuesday, the South Korea’s Hynix officially announced that it had already submitted a bid with a non-bid nature last week. There are no further data regarding the proposed funds or how big a stake it intends to acquire. On the other hand, sources close to Toshiba Corp. said that the company would hand over only less than 20% of the NAND stake at the future bid.
This industry is expected to rise to new levels as analysts see a booming demand for faster and better smartphones and data servers. This year only, the memory card sales segment will rise to $116 billion, which is a record value. As a result, Toshiba Corp. is pursuing to raise total funds of $1.7 billion for its 20% stake from its memory business.
Image source: 1