Shoppers watch air conditioners displayed at a Toshiba electronics store in Tokyo. Pic: AP

Toshiba to consider spin-off of chip-making business stake to Western Digital

TOSHIBA, one of Japan’s biggest multinational conglomerate corporations, is reportedly in talks with Western Digital Corp. to spin off its semiconductor business assets at a roughly 20 percent stake, which will cost the latter up to US$2.7 billion.

According to the Asian Nikkei Review, which cited sources familiar with the matter, there are some U.S. investment funds that have also expressed interest in Toshiba’s stake.

In a statement, Toshiba said it had indeed been considering several options, including a spin-off, but has not confirmed any decisions. Reuters reports that the memory business generates most of the corporation’s operating profit.

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In fiscal 2015, memory chips accounted for the biggest part of the 1.57 trillion yen in sales of Toshiba’s semiconductor operations, proving itself to be a lucrative asset.

The potential sale of the stake to California-based Western Digital is not completely out of the blue – Toshiba and global hard-drive leader Western Digital already jointly operate a flash memory plant in Yokkaichi city, within the Kansai region.

The Nikkei reported that one of the proposal was for Toshiba to sell an estimated fifth of the chip-making business for about 200 billion – 300 billion yen (US$1.77 billion – US$2.66 billion) while staying in control of a majority stake.

A brand new chip company would come into being as early as the first half of 2017, the Nikkei added.