Loss-hit Toshiba splits off memory chip business

Toshuba has split off its memory chip business into a separate company, Toshiba Memory Corporation, as of April 1.

The manufacturer said in a statement that it had taken this step in order to facilitate the ramping up of production of large-capacity, highly reliable 3D memory devices essential to meet the growing demand for storage. Its imaging sensor business was not included in the move.

The statement said: “Splitting off the memory business into a single business entity will afford it greater flexibility in rapid decision-making and enhance financing options, which will lead to further growth of the memory business.”

Toshiba added that it was considering restructuring with third-party capital, including the potential sale of a majority stake.

There was indeed been considerable speculation on possible buyers on the run-up to the announcement, with Western Digital named as a front-runner and Hon Hai (Foxconn) proposing a consortium bid that would include Apple, Amazon, Dell and Sharp.

All this followed the release of unaudited results for the year to the end of December 2016 that showed an operating loss of ¥576.3 billion (£4.21bn) compared with last year’s loss of ¥231.9bn.

The company had already missed the filing dates twice and had it not filed this time would have faced delisting from the Tokyo Stock Exchange.

In terms of sales, Toshiba reported a figure for 2016 of ¥3,846.9bn compared with ¥4,013.5bn in the previous fiscal year.

The latest results were unaudited because Pricewaterhouse Coopers Aarata said it was still carrying out investigations surrounding the Westinghouse situation – the Toshiba-owned company was placed into Chapter 11 bankruptcy protection in March after it suffered a $6.3bn (£5bn) writedown on its US nuclear business.

Reports in The Japan Times at the time quoted a statement from Toshiba as saying that the massive losses reported for 2016 cast “substantial doubt about the company’s ability to continue as a going concern”.