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Toshiba considers that it no longer sells semiconductor business: it will continue to be the main business

Monday,Apr 23,2018

 According to reports from Japanese media, Toshiba is considering not to sell its semiconductor business, and continues to retain the business as a pillar of its performance.

Currently, Toshiba’s plan to sell the semiconductor business to Bain Capital to lead a consortium is being submitted to the Chinese regulatory authorities for review. If there is no Chinese regulatory approval before the end of May, the sale will be suspended. At the same time, Toshiba’s internal complaints about whether “sale has lost its meaning” are emerging.
The semiconductor business accounts for about 90% of Toshiba’s operating profit. In order to solve the debt problem, Toshiba decided to sell the semiconductor business in September last year under the pressure of the bank. However, Toshiba’s memory chips rank second in global market share, behind Samsung. Therefore, for Toshiba, selling the business is a difficult decision.
However, continuing to retain semiconductor business will also bring risks. If you want the business to remain competitive, Toshiba will need to invest 300 billion yen in equipment every year. However, if the demand for the smart phone market declines, doing so may cause Toshiba’s financial situation to deteriorate rapidly.