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Kioxia (before Toshiba Memory)

Company

Assets

Assets

+ Kioxia (before Toshiba Memory)

The Toshiba Memory Europe (TME) company is the European division of TMC corporation.

2019

Purchase of SSD business of Liteon for $165 million

At the beginning of September, 2019 it became known of purchase of business on release solid state drives Lite-On Technology of Toshiba Memory company. The transaction worth $165 million is going to be closed by April, 2020. In more detail here.

Toshiba Memory is renamed into Kioxia

On July 18, 2019 Toshiba Memory announced change of the name with Kioxia. Will rename all companies, entering into group.

So, Toshiba Memory Systems will be called Kioxia Systems, Toshiba Memory Advanced Package — Kioxia Advanced Package, Toshiba Memory Europe — Kioxia Europe, etc. Rebranding will become effective on October 1, 2019.

As reported in the press release, the word Kioxia consists of two — the Japanese kioku (in transfer "memory") and the Greek axia ("value"). Consolidation of memory and value symbolizes the main mission of the company — to improve the world thanks to the memory which became a basis of vision of Toshiba Memory.

The new owner of Toshiba Memory renamed the company and will bring her to the exchange
The new owner of Toshiba Memory renamed the company and will bring her to the exchange
«
Kioxia will cultivate the new era of memory determined by the fast-growing needs for high-capacity high-performance storages that will allow the company grow in the quality of leading manufacturer a flash memory, says devoted to rebranding of Toshiba Memory for many years steadily.
»

In 2018 in Bain Capital investment company which headed consortium of buyers of semiconductor business Toshiba, said that Toshiba Memory will be renamed and brought to the exchange. IPO terms then were not called and it was only said that listing should take place "in several years" on Tokyo Stock Exchange.

According to Financial Times, renaming of Toshiba Memory marks new chapter in the history of the company which before sale was a subject of pride of the Japanese conglomerate.

Change of a name happened how Toshiba Memory prepares for work in "very indefinite environment" which became like that in the conditions of aggravation of the trade conflict between Japan and South Korea.

«
Risks of emergence of unfavorable events became more in comparison with to what each of us got used. In the conditions of independence of the company the management became much stronger focused on external market forces and to react quickly to the changing conditions — the chairman of Toshiba Memory Stacy J. Smith said.[1]
»

2017

The official statement about sale of Toshiba Memory

On September 20, 2017 Toshiba officially announced a name of the buyer of the semiconductor division Toshiba Memory, having put thereby the end to months-long fight for this business.

According to Bloomberg with reference to the statement of Toshiba, Board of Directors the flash memory agreed to sell division on release of chips to consortium led by the American private investment company Bain Capital for 2 trillion yens ($18 billion).

Toshiba sells for $18 billion semiconductor business to group with participation of Apple, Dell and Seagate
Toshiba sells for $18 billion semiconductor business to group with participation of Apple, Dell and Seagate

This group also included SK Hynix, Hoya  and Toshiba which together with Bain will redeem ordinary and convertible shares of Toshiba Memory for the amount of 960 billion yens, and Apple, Dell, Kingston Technology and Seagate Technology which will spend 440 billion yens for acquisition of convertible and inconvertible preferred securities, told news agency the informed sources.

Toshiba sold semiconductor division and ceased to be engaged in this business and also to consider it in financial statements. But Toshiba had 40.2% share in the new company created based on this division.

Toshiba does not call all participants of the transaction and only declares own plans to reinvest 350.5 billion yens in the semiconductor division. Close the transaction thanks to which Toshiba intends to return to the positive volume of own means, it is planned by March 31, 2018.

The corporation is interested in as soon as possible to sell semiconductor assets as the negative capital threatens Toshiba with withdrawal of its actions from Tokyo Stock Exchange.

Toshiba officially announced plans to sell semiconductor business at the beginning of 2017. Since then the set of rumors about potential buyers went to media. Among the most probable applicants there was a producer of hard drives Western Digital which even filed a lawsuit against Toshiba in attempt to prohibit the conclusion of the transaction with someone to others.

According to interlocutors of Bloomberg if Western Digital and Toshiba do not resolve a dispute before closing of the transaction, three joint ventures of the companies will not be transferred to consortium led by Bain, and the amount of purchase will be reviewed. Less than 5% of cost of Toshiba Memory are the share of these assets, estimates an edition source.[2]

Government structures of Japan and Bain Group redeem business of semiconductors of Toshiba for $18 billion

On June 20, 2017 Toshiba told the name of the preferable buyer of its semiconductor business of TMC - consortium from the Japanese government investors and Bain Group company. Transaction amount ~ $18 billion.

As a part of consortium the public investment fund Innovation Network Corporation of Japan (INCJ), Development bank of Japan (Development Bank of Japan), bank from Mitsubishi UFJ Financial Group financial group and also the private investment company Bain Capital and South Korean producer of chips of memory SK Hynix Toshiba[3].

And though Toshiba announced the official choice of the partner from outside, the positive perspective of closing of the transaction remains undecided: the partner of the company, the American Western Digital, in May started legal preparations for prevention of the conclusion of the transaction without its participation or consent.

After SanDisk redeemed from Western Digital business on production of flash drives, the companies created the enterprise, joint with Toshiba, within which Toshiba is obliged to receive the consent of Western Digital to sale of the share of business.

Court session at the request of Western Digital within which the question of the injunction of sale of semiconductor business of Toshiba will be considered will take place on July 14, 2017 in the USA.

Final closing of the transaction on sale of TMC is planned by March, 2018.

According to the statement of Toshiba, investors offered the companies of ¥2 trillion (about $18 billion). It is less, than ¥ yens 2.2 trillion (about $19.8 billion) offered earlier by Broadcom company in partnership with private investment company Silver Lake.

The choice of consortium from government investors and Bain Capital, according to most of network analysts, with guarantee will get approval from the Japanese government which is extremely interested to leave modern technologies of Toshiba and its production heritage under internal control. Besides, analysts consider, the fact of months-long difficult negotiations about the choice of the investor does not leave doubts that approval will be got only by option with government participation.

Pricing war for semiconductor business of Toshiba

The Japanese government brings together Japanese-Korean-American consortium which could offer the price for semiconductor business of Toshiba, having killed thus a rate of the American producer of Broadcom chips. The Japanese edition Asahi[4] reported about it[5].

Appearance of the new applicant for purchase of Toshiba can lead to pricing war, Fortune writes. The new proposal will be made at the last minute as on June 15 Toshiba should decide on the candidate of the buyer finally. There is a chance that intervention of new consortium will break decision-making, Reuters believes.

The offer jointly develop the Japanese Ministry of Economics, trade and the industry, Development bank of Japan (DBJ) and the Innovation Network Corporation of Japan (INCJ) company supported by the state. Suggested price will be higher than 2 trillion yens ($18 billion) necessary for Toshiba to improve things, Asahi with reference to insiders reports.

From this amount 300 billion yens INCJ, DBJ and the American private company Bain Capital are going to invest. Toshiba will add to it about 100 billion yens, 140 billion more yens will gather other private Japanese companies. The American investment firm KKR also considers the possibilities to enclose in purchase of 100 billion yens.

The South Korean company Hynix will borrow to the project of 300 billion yens, at the same time will not receive shares of Toshiba. Mitsubishi UFJ Financial Group will provide 400 billion more yens. Earlier it was reported that Hynix, the world's second in value producer of modules of computer memory, is ready to purchase 20% in business of Toshiba, having paid for them 2-3 trillion wons ($1.8 – $2.7 billion).

Toshiba begins negotiations on sale of business of chips of memory

On April 17, 2017 it became known of activity of a number of the companies in intention to purchase business of chips of memory of Toshiba. The company announced a flash memory sale of a majority share in the business of chips in January, 2017.

The reason of sale of an asset - need to find means for a covering of multi-billion write-off.

According to the publications NHK, Apple combines efforts with Foxconn, being going to offer "several billion dollars"[6] for semiconductor business[6]. The possible market participants interested in purchase according to CRN/USA:

Foxconn

The company makes structures of Apple. According to messages in industry media, the company expressed readiness to lay out up to $27 billion for semiconductor business of Toshiba.

According to The Wall Street Journal, this digit is more than $18 billion - analysts estimated business at such amount. Success of Foxconn, awake like that will take place, will become success and her customer of Apple - she will receive production of the modules NAND in the order.


Silver Lake

The private investment firm Silver Lake Partners, in partnership with the chipmaker of Broadcom, is interested in purchase of this business from Toshiba, Nikkei Asian Review reported. Silver Lake acted together with Broadcom, having offered $17.9 billion.


SK Hynix

The Korean business newspaper Maeiul announced readiness of consortium led by South Korean SK Hynix to redeem a majority share in business of chips of Toshiba for the amount> to $9 billion.


Micron Technology

This business of Toshiba is attractive to the American chipmaker of Micron Technology by an opportunity to increase a share in the market of DRAM, having become the only supplier of DRAM for Toshiba.

Western Digital

Western Digital could also be the potential buyer of business of Toshiba, according to The Wall Street Journal. Between the companies the partnership agreement works in this area that confirms the probability of such succession of events.

Selection of business on production of memory in Toshiba Memory Corporation (TMC) company

Due to the need of an urgent covering of losses after bankruptcy of the American division in the field of nuclear power of Westinghouse Electric the Toshiba corporation announced on April 1, 2017 selection of own business on development and production a flash memory in separate company under the name of Toshiba Memory Corporation (TMC). This company is put up for sale. In more detail about the problems in Toshiba which arose in 2015 see Toshiba.

Board of Directors of Toshiba the flash memory makes the decision on forced sale of business

On January 27, 2017 it became known about decision-making by Board of Directors of Toshiba - to select business of issuer of chips of memory in the separate enterprise and to sell in parts to third-party investors.

Desire of the management of Toshiba to avoid financial collapse because of multi-billion capital transfers of Westinghouse Electric Company (subsidiary of Toshiba in the field of nuclear power engineering, in the USA) became the reason for such solution.

Specialists consider the events one of the first tough solutions of the management of the Japanese conglomerate which others as sale of a part of actions of the reorganized semiconductor business will cover only a part of financial problems of Westinghouse will follow: the amount of payments, according to the Japanese media, is estimated in ~ by ¥680 billion (about $6 billion)[7].

For January, 2017 semiconductor business of Toshiba Group holds the second place in the world ranking of the largest producers of chips a flash memory of NAND type (the leader in this segment of Samsung Electronics). Production of memory regularly makes for Toshiba a considerable part of its operating profit: only for the first half a year 2016 chips of memory brought Toshiba of ¥50.1 billion ($441 million) arrived that made more than a half from all operating profit of the company for this period.

Toshiba is going to sell 19.9% of the company on production of semiconductors, expecting to receive for them ~ ¥300 billion ($2.61 billion), reported the Nikkei agency, referring to informed sources in the industry.

The management of Toshiba promised to announce official data on scales of payments of division of nuclear power engineering in the USA on February 14, within the report for the third financial quarter of the company. According to preliminary estimates analysts, all business on production of chips of memory of Toshiba costs ~ ¥1-1.5 trillion ($9-13 billion).

Toshiba hurries to close the deal on sale of shares until the end of financial year which comes to an end for the company on March 31, 2017.

Mark Newman, the analyst of the Hong Kong Sanford Bernstein, considers - sale of these assets will be short-term partial solution of the problem of Westinghouse. According to Newman, business on release the NAND flash, brings Toshiba "to 75% of all profit", and it can be considered the most valuable company asset therefore the analyst will not be surprised at all if through any time sale of another 20% of stocks follows.

Business of production of chips of memory is characterized by recurrence, periodically requires considerable investments and partnership with Toshiba, the experiencing difficulty with payments of division of nuclear power engineering in the USA, bears additional risks. All this plus deadlines of sale raise at analysts doubts that Toshiba will be able to receive the fair price for the assets.

The Goldman Sachs Group investment bank will be engaged in service of the transaction on sale of semiconductor assets of Toshiba Group, reported week before the Bloomberg agency.

In the list of potential investors private private equity funds, business partner of Toshiba American Western Digital and government development bank of Japan (Development Bank of Japan).

Interest in the transaction is shown by producers of semiconductors: South Korean SK Hynix, Chinese concern Tsinghua Uni Group and American Micron Technology.

Terry Gou, the head of the Taiwan contract producer of electronics of Foxconn (Hon Hai Precision Industry) is interested in acquisition of a share in this business too, reported the Japanese business weekly Toyo Keizai.

Notes