Kioxia

Toshiba Memory Europe (TME) is the European division of TMC Corporation.

2022: Memory Chip Market Share Cut

2020: Finalize acquisition of Lite-On SSD business

On July 1, 2020, it became known that KIOXIA Holdings Corporation, a memory solutions company, completed the acquisition of Solid State Storage Technology Corporation, a solid state drive (SSD) business owned by LITE-ON Technology Corporation, as well as its subsidiaries. Read more here.

2019

Purchase of Lite-On SSD business for $165 million

In early September 2019, it became known about the purchase of a business for the release SSDs Lite-On Technology of Toshiba Memory. The deal worth $165 million is scheduled to close by April 2020. More. here

Toshiba Memory renamed Kioxia

On July 18, 2019, Toshiba Memory announced a name change to Kioxia. Rename all companies in the 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 enter into force on October 1, 2019.

According to a press release, the word Kioxia consists of two - Japanese kioku (translated as "memory") and Greek axia ("value"). Combining memory and value symbolizes the company's main mission - to improve the world thanks to the memory that has become the basis of the vision of Toshiba Memory.

The new owner of Toshiba Memory renamed the company and will bring it to the stock exchange

Kioxia will cultivate a new era of memory, defined by the rapidly growing needs for high-performance, large-capacity storage, which will allow the company to grow steadily for many years as a leading flash memory manufacturer, according to a statement on the rebranding of Toshiba Memory.

In 2018, the investment company Bain Capital, which led a consortium of buyers of Toshiba's semiconductor business, said Toshiba Memory would be renamed and listed. The timing of the IPO was not then announced and only said that the listing should take place "in a few years" on the Tokyo Stock Exchange.

The renaming of Toshiba Memory marks a new chapter in the company's history, which was a point of pride for the Japanese conglomerate before the sale, the Financial Times reported.

The name change comes as Toshiba Memory prepares to operate in a "very uncertain environment" that has become one amid the worsening trade conflict between Japan and South Korea.

The risks of adverse events have increased compared to those to which each of us is accustomed. With the independence of the company, management has become much more focused on external market forces and quickly respond to changing conditions, said Toshiba Memory Chairman Stacy J. Smith.[1]

2017

Official announcement of the sale of Toshiba Memory

On September 20, 2017, Toshiba officially announced the name of the buyer of its semiconductor division Toshiba Memory, thereby putting an end to the months-long struggle for this business.

According to Bloomberg, citing a statement from Toshiba, the board of directors agreed to sell the flash memory chip division to a consortium led by American private equity firm Bain Capital for 2 trillion yen ($18 billion).

Toshiba sells $18 billion semiconductor business to a group of companies involving Apple, Dell and Seagate

This group also includes SK Hynix, Hoya and Toshiba itself, which, together with Bain, will buy out ordinary and convertible shares of Toshiba Memory in the amount of 960 billion yen, and Apple, Dell, Kingston Technology and Seagate Technology, which will spend 440 billion yen on the acquisition of convertible and non-convertible preferred securities, knowledgeable sources told the news agency.

Toshiba sold the semiconductor division and ceased to engage in this business, as well as take it into account in the financial statements. But Toshiba still has a 40.2% stake in the new company, created on the basis of this division.

Toshiba itself does not name all participants in the transaction and only declares its own plans to reinvest 350.5 billion yen in its semiconductor division. It is planned to close the deal, thanks to which Toshiba intends to return to a positive amount of its own funds by March 31, 2018.

The corporation is interested in selling semiconductor assets as soon as possible, as negative capital threatens Toshiba to withdraw its shares from the Tokyo Stock Exchange.

Toshiba officially announced plans to sell the semiconductor business in early 2017. Since then, there have been many rumors in the media about potential buyers. Among the most likely contenders was hard drive maker Western Digital, which even sued Toshiba in a bid to block a deal from being struck with someone else.

According to Bloomberg interlocutors, if Western Digital and Toshiba do not resolve the dispute before the deal closes, the three joint ventures of the companies will not be transferred to a consortium led by Bain, and the purchase amount will be revised. These assets account for less than 5% of the value of Toshiba Memory, the source estimates.^[2]

Japanese government structures and Bain Group buy out Toshiba semiconductor business for $18 billion

On June 20, 2017, Toshiba named the preferred buyer of its TMC semiconductor business, a consortium of Japanese government investors and Bain Group. The amount of the transaction ~ $18 billion.

As part of the consortium, the state investment fund Innovation Network Corporation of Japan (INCJ), the Development Bank of Japan, a bank from the Mitsubishi UFJ Financial Group, as well as private investment company Bain Capital and South Korean memory chip maker SK Hynix^[3].

And while Toshiba has announced the official choice of a partner from the outside, the positive prospect of the deal closing remains in question, with the company's partner, US-based Western Digital, launching legal preparations in May to prevent the deal being struck without its participation or consent.

After SanDisk bought out the flash business from Western Digital, the companies formed a joint venture with Toshiba, under which Toshiba is obliged to obtain Western Digital's consent to sell its share of the business.

The hearing at the request of Western Digital, which will consider the issue of an injunction on the sale of Toshiba's semiconductor business, will take place on July 14, 2017 in the United States.

The final closure of the TMC sale is scheduled by March 2018.

According to Toshiba, investors offered the company ¥2 trillion (about $18 billion). This is less than the ¥2,2 trillion yen (approximately $19.8 billion) previously proposed by Broadcom in partnership with private equity firm Silver Lake.

The choice of a consortium of government investors and Bain Capital, according to most network analysts, is guaranteed to receive approval from the Japanese government, which is extremely interested in leaving Toshiba's modern technologies and its production heritage under internal control. In addition, analysts say, the very fact of many months of difficult negotiations on the choice of an investor leaves no doubt that only the option with government participation will receive approval.

Toshiba Semiconductor Business Price War

The Japanese government is assembling a Japanese-Korean-American consortium that could offer its price for the semiconductor business, Toshiba thus outbidding the rate of the American chipmaker Broadcom. This was reported by the Japanese edition of Asahi^[4]

The emergence of a new contender for the purchase of Toshiba could lead to a price war, writes Fortune. The new proposal will be made at the last moment, since on June 15 Toshiba must finally decide on the buyer's candidacy. There is a chance that the intervention of a new consortium will disrupt the decision, believes. Reuters

The proposal is jointly developed by the Japanese Ministry of Economy, Trade and Industry, the Development Bank of Japan (DBJ) and the state-backed Innovation Network Corporation of Japan (INCJ). The proposed price would be above the 2 trillion yen ($18 billion) Toshiba needs to fix the cases, Asahi reported, citing insiders.

Of this amount, INCJ, DBJ and the American private company Bain Capital are going to invest 300 billion yen each. Toshiba itself will add about 100 billion yen to this, another 140 billion yen will be collected together by other private Japanese companies. American investment firm KKR is also considering investing 100 billion yen in the purchase.

The South Korean company Hynix will borrow 300 billion yen for the project, while it will not receive shares in Toshiba. Mitsubishi UFJ Financial Group will provide another 400 billion yen. Earlier it was reported that Hynix, the world's second largest manufacturer of computer memory modules, is ready to buy 20% in Toshiba's business, paying 2-3 trillion won ($1.8 - $2.7 billion) for them.

Toshiba begins talks to sell memory chip business

On April 17, 2017, it became known about the activity of a number of companies in the intention to buy the Toshiba memory chip business. The company announced the sale of a majority stake in its flash memory chip business in January 2017.

The reason for the sale of the asset is the need to find funds to cover the multi-billion dollar write-off.

According to NHK Apple publications, joins forces with, Foxconn preparing to offer "several billion" dollars for the semiconductor business Toshiba^[5] market participants interested in buying, according to CRN/:USA

Foxconn

The company makes Apple devices. According to industry media reports, the company has expressed its readiness to shell out up to $27 billion for Toshiba's semiconductor business.

According to The Wall Street Journal, this figure is more than $18 billion - analysts estimated the business at this amount. The success of Foxconn, if it takes place, will also be a success for its customer Apple - it will have at its disposal the production of NAND modules.

Silver Lake

Private equity firm Silver Lake Partners, in partnership with chipmaker Broadcom, is interested in buying the business from Toshiba, the Nikkei Asian Review reported. Silver Lake paired with Broadcom, offering $17.9 billion.

SK Hynix

Korean business newspaper Maeiul announced the readiness of a consortium led by South Korean SK Hynix to buy out a majority stake in Toshiba's chip business for > $9 billion.

Micron Technology

For American chipmaker Micron Technology, this Toshiba business is attractive to the opportunity to increase its share of the DRAM market, becoming the sole DRAM supplier to Toshiba.

Western Digital

Western Digital could also be a potential buyer of Toshiba's business, according to The Wall Street Journal. There is a partnership agreement between the companies in this area, which confirms the likelihood of such a development.

Spin off the memory business to Toshiba Memory Corporation (TMC)

Due to the need to urgently cover losses after the bankruptcy of its US nuclear power division Westinghouse Electric, Toshiba Corporation announced on April 1, 2017 that it would spin off its own flash memory development and production business into a separate company called Toshiba Memory Corporation (TMC). It is this company that is put up for auction. For more information on the 2015 Toshiba issues, see Toshiba.

Toshiba Board Decides Forced Sale of Flash Memory Business

On January 27, 2017, it became known about the decision by the Toshiba board of directors to separate the company's memory chip business into a separate enterprise and sell it in parts to third-party investors.

The reason for this decision was the desire of Toshiba management to avoid a financial collapse due to multi-billion dollar payments on the accounts of Westinghouse Electric Company (Toshiba nuclear power subsidiary in the United States).

Experts consider what is happening to be one of the first tough decisions of the leadership of the Japanese conglomerate, followed by others, since the sale of part of the shares of the reorganized semiconductor business will cover only part of Westinghouse's financial problems: the amount of payments, according to Japanese media, is estimated at ~¥680 billion (about $6 billion)^[6].

As of January 2017, the Toshiba Group semiconductor business ranks second in the world ranking of the largest manufacturers of flash memory chips NAND- type (leader in this segment Samsung Electronics). Memory production regularly brings Toshiba a significant part of its operating profit: in the first six months of 2016 alone, memory chips brought Toshiba ¥50,1 billion ($441 million) in profit, which amounted to more than half of the company's total operating profit for this period.

Toshiba plans to sell 19.9% of the semiconductor company, hoping to receive ~¥300 billion ($2.61 billion) for them, Nikkei reported, citing informed sources in the industry.

Toshiba management promised to announce official data on the scale of payments to the nuclear power division in the United States on February 14, as part of the company's fiscal third quarter report. According to preliminary analysts, the entire Toshiba memory chip business costs ~¥1 -1.5 trillion ($9-13 billion).

Toshiba is in a hurry to complete the sale of shares before the end of the financial year, which ends for the company on March 31, 2017.

Mark Newman, an analyst at Hong Kong-based Sanford Bernstein, believes that the sale of these assets will be a short-term partial solution to the Westinghouse problem. The NAND flash business brings Toshiba "up to 75% of all profits" and could be considered the company's most valuable asset, Newman said, so the analyst wouldn't be surprised at all if another 20% sale followed after a while.

The memory chip business is cyclical, periodically requires significant investment and the partnership with Toshiba, which is experiencing difficulties with payments from the nuclear power division in the United States, carries additional risks. All this, plus the tight timing of the sale, raises doubts among analysts that Toshiba will be able to get a fair price for its assets.

The transaction for the sale of semiconductor assets of Toshiba Group will be serviced by the investment bank Goldman Sachs Group, Bloomberg reported a week earlier.

Private private equity funds, Toshiba business partner Western Digital and the Government Development Bank of Japan are on the list of potential investors.

Semiconductor manufacturers are showing interest in the deal: South Korean SK Hynix, Chinese concern Tsinghua Uni Group and American Micron Technology.

Terry Gou, head of Taiwanese contract electronics manufacturer Foxconn (Hon Hai Precision Industry), is also interested in acquiring a stake in the business, Japanese business weekly Toyo Keizai said.

Notes