Tag: Toshiba

Memory chips destined to be a load of old Tosh

ToshibaToshiba has approved plans to make its core memory chip business a separate company and seek outside investment for it.

The company is desperately trying to avoid being crippled by an upcoming multi-billion-dollar write-down for its US nuclear business.

The proceeds are set to cover part of the charge for cost overruns at a newly acquired US power plant construction business which is thought to be about $6 billion.

Toshiba’s memory chip business is its crown jewel, accounting for the bulk of its operating profit.

Toshiba is looking to sell roughly 20 percent and potential investors include private equity firms, business partner Western Digital Corp and the government-backed Development Bank of Japan, sources have said.

It wants to complete the sale by the end of the financial year in March to stop shareholder equity from being wiped out by the charge.

However, the move is seen as a band-aid for the sick company as the NAND business is the only one with value, as it makes up all of the semi-conductor profits, which comprise 75 percent of the overall company’s profit.

Even if the deal pans out Tosh will probably have to sell more bits of the company in the future.

A raft of private equity funds, including Silver Lake and Permira, have signed non-disclosure agreements with Toshiba, sources said.

Western Digital, which operates a NAND plant in Japan with Toshiba, may seem like a natural buyer of a large stake in the chip business, a sale might be difficult to pull off before March as it would attract a lot of snuffling from anti-trust watchdogs.

Toshiba estimates the value of its memory chip business at $9-13 billion.

Toshiba Chief Executive Satoshi Tsunakawa recently told the company’s main creditors of its plans and that Tosh will flog off other businesses.

Japanese business weekly Toyo Keizai reported that Terry Gou, chief executive of Foxconn, the world’s largest contract electronics maker, is interested in either taking a stake in or buying some of Toshiba’s businesses.

Toshiba shares are a load of old Tosh

elepantsShares in Toshiba have been falling faster than a team of free falling performing elephants which forgot to pack a key ingredient of their act.

The share price fell more than 19 percent on Thursday which was the third day of heavy losses after the Japanese outfit said it faced a potential multi-billion dollar write down.

Toshiba announced that cost overruns at a US nuclear business it bought from Chicago Bridge & Iron last year  meant it could face “several billion dollars” in charges. Basically it paid far too much for the outfit.

Ratings agencies were quick to respond.  Moody’s became even more moody and downgraded Toshiba’s rating, pushing it deeper into “junk”, or non-investment grade territory where share price is less than the value of the paper it is printed on.

Masako Kuwahara, Moody’s lead analyst for Toshiba said that while Tosh is still assessing the exact amount of the impairment loss, its financial metrics will likely deteriorate further, potentially resulting in a negative equity position.  Since Tuesday’s warning, Toshiba’s share drop has wiped about $6.5 billion off of its market value.

Samsung likely to lead us through the gloom

SamsungWhile the world’s semiconductor industry is in a bit of a sulk, Samsung is expected to cope much better and might make a bob or two.

Intel has had to cut 12,000 jobs, Qualcomm has said fiscal third-quarter chip shipments could fall as much as 22 percent and SK Hynix saw a 65 percent slide in quarterly operating income – its weakest result in three years.

Samsung, while hurting, is not hurting as much. In fact some analysts expect to see a drop of 10 percent in January-March from a year earlier. But that is really a scratch instead of the others, which have more or less lost limbs.

This is because it is in the right place as clients shift towards premium power-conserving DRAM chips for smartphones, as well as solid state drives for data storage using 3D NAND chips.

The technological gap between Samsung and its competitors in fields such as DRAM and NAND has been widening.  Samsung’s chip operating profit is expected to be nearly five times that of SK Hynix.

Samsung also runs the world’s biggest smartphone business, giving it a captive customer for its chips that none of its rivals have.

Healthy initial sales for Samsung’s new flagship Galaxy S7 smartphones are expected to be the main driver of first-quarter operating profit, which the firm has said likely rose 10.4 percent from a year earlier to $5.8 billion.

Samsung’s NAND chip prospects are also expected to do well. Samsung was the first to mass produce NAND flash chips using a technology called 3D NAND, helping it assume a dominant position in higher-margin products such as solid-state hard drives for computers and servers.

Some analysts think that Samsung’s  NAND revenue will climb 16 percent and NAND operating profit to jump 69 percent this year. Shipments will also likely outpace the industry average, allowing Samsung to seize more market share.

NAND rivals Toshiba , SK Hynix and Micron are three years behind technology-wise. Samsung has better production technology for DRAM chips, saying the firm is ahead of its closest rivals by at least a year.

Samsung commanded 58 percent of the mobile DRAM market as of the fourth quarter of 2015, according to TrendForce. Mobile DRAM revenue also accounted for more than half of Samsung’s overall DRAM sales for October-March.

Toshiba wants to build chip plant

toshiba-11q4-C655D-S5330-cover-lgWhile it is selling off bits of itself to make up the money lost in accounting scandals Toshiba wants to invest $3.2 billion  to build a new semiconductor plant in Japan.

The company is investing in the plant, which will make its proprietary 3D flash chips, over a period of three years till March 2019, it said in a statement Thursday. Toshiba expects output to begin no earlier than 2018.

The outfit has indicated that it wants to grow its chip business even if its appliances and healthcare need to be sold off as soon as possible. Canon has already agreed to buy Toshiba’s medical equipment unit for $5.9 billion

The chip investment will take place over three years, Toshiba said.

It also said separately that it was delaying its planned adoption of international financial reporting standards (IFRS). It still planned to eventually adopt the global standard, it said, but efforts to do so had been held up since last year’s accounting scandal.

Toshiba finds more accountacy holes

ToshibaTroubled Toshiba is still having problems with its cooked books.

The outfit revealed additional accounting irregularities after a multi-billion dollar accounting scandal last year, rekindling doubts over the company’s pledge to improve transparency.

The laptops-to-nuclear conglomerate said it had overstated past profits by $51.30 million on a pretax basis due to seven new accounting errors.

Toshiba said the company had treated the additional errors as losses in financial reports for two quarters through December, but had not publicly announced them because the amount was below the threshold requiring regulatory disclosure.

The company “lacked awareness for appropriate disclosure”, a Toshiba spokeswoman said.

Fixing responsibilities for the latest errors, Toshiba said it had “punished” 40 more employees, in addition to 26 which it said previously had been punished. The company has not specified what form the punishment has taken.  They might have been taken to the carpark covered with cherry blossom, told to write a poem about the fleeting nature of life, and the importance of not getting caught, before offing themselves with a canteen plastic knife.

Toshiba also said it would aim to bolster internal controls by hiring a permanent auditor who will oversee its accounts to ensure the company complies with regulations.

Toshiba “will make a united effort to improve internal control and corporate culture,” it said in a statement.

Chief Executive Masashi Muromachi has announced more than 10,000 job cuts and plans to sell its loss-making laptops and home appliances businesses.

Toshiba last week said it granted Canon exclusive negotiating rights to buy its medical equipment unit after a hotly contested auction, and one source with knowledge of the talks put Canon’s offer at more than $6 billion.

Funds from the deal will help Toshiba drop earlier plans to seek about $1.8 billion in additional loans from Sumitomo Mitsui Banking Corp, Mizuho Bank and Sumitomo Mitsui Trust Bank.



Toshiba flogs part of its chip biz

ToshibaJapan’s troubled Toshiba plans to sell part of its chip business as it aims to recover from a $1.3 billion accounting scandal.

Early interest in the sale has been shown by the Development Bank of Japan as the state-owned bank has already invested in Seiko’s semiconductor operations.

The sale would exclude Toshiba’s mainstay NAND flash memory operations which are still doing rather well.

Tosh is flogging its businesses that handle system LSI and discrete chips, which are widely used in cars, home appliances and industrial machinery. However they lost $2.78 billion in the year ended March 2015.

Toshiba has been focusing on nuclear and other energy operations, as well as its storage business, which centers on NAND flash memory chips.

Tosh wants to invest heavily in its flash memory production capacity in Japan to better compete with Samsung.


Toshiba begs for billions

Old Japanese Beggar --- Image by © Corbis

Old Japanese Beggar — Image by © Corbis

Troubled Japanese electronics outfit Toshiba has popped around to the bank to ask for a quick loan to sort itself out.

Toshiba has asked for a $2.49 billion credit line by the end of January which it says it will use to fund a large-scale restructuring.

The Nikkei Financial Daily earlier said it would likely seek help from banks including Mizuho Bank and Sumitomo Mitsui Banking. This is not the first time that Tosh executives have put on their best suit and worn a tie to see the bank manager but it needs a wider safety net as it seeks to recover from the book-keeping scandal in which it overstated profits from around 2009.

Moody’s recently downgraded the company’s debt rating to junk status, and the Tokyo Stock Exchange has placed Toshiba stocks in a special “watch” category to see whether it can improve internal controls. Both moves have made it harder for the company to raise funding through debt or new shares.

The company said last week it would slash 6,800 consumer electronics jobs, taking total cuts beyond 10,000, including previously announced plans, as the sprawling conglomerate focuses on chips and nuclear energy. It also expects a record net loss this year.



Notebook vendors face fresh challenges

_asustek_and_amd_new_partnership_to_boost_upcoming_desktop_apuA report said that Chinese entrants into the notebook market in Western Europe and the USA will pose new challenges to existing vendors.

Digitimes said that Xiaomi and Huawei will launch products in the more “mature” markets next year, giving HP, Dell, Lenovo and the other traditional players a run for their money.

The same report suggested that Samsung is preparing a fresh foray into the notebook market soon after it withdrew from the fray last year.

And it suggests there is pressure on Taiwanese giants Acer and Asustek to merge in face of declining sales in the notebook sector. Acer is firmly against such a move.

Lenovo is in the doldrums, while Digitimes said in its report that Toshiba and Fujitsu are likely to consign their notebook lines to Japan Industrial Partners (JIP).

JIP had previously taken over Sony’s notebook business, once one of the corporation’s jewels in its crown.

Toshiba to axe 7,000 peoples’ jobs

ToshibaThe long awaited restructuring of Toshiba will put at least 7,000 people out of work, it has emerged.

Toshiba will sell off its TV business, can its PC notebook business and streamline itself by concentrating on making semiconductors and working on nuclear energy.

Toshiba found itself in a $1.3 billion accounting mess and the new management has been forced to make drastic changes.

Toshiba has been in notebook PCs since the very beginning but while it used to be one of the top notebook manufacturers, that position has dwindled over the years.

Earlier this year an independent committee concluded that Toshiba was dysfunctional and treated its employees badly.

The job cuts will be implemented in stages.

Troubled Toshiba cuts 7,000 jobs

Samurai_Warrior_ASC_2799Workers at the troubled Toshiba are paying the price for their managers’ book cookery which could have won them a top price in the British Bake-Off.

Toshiba has said that more than 7,000 workers will be made redundant as a sacrifice to the accounting gods, which need to be appeased by the company’s antics.

Most of the 6,000-7,000 job cuts will be in the company’s lifestyle segment, which includes consumer appliances.

Toshiba is also looking to “drastically” reduce operations at its Ome factory, Tokyo, which makes televisions and personal computers, and is considering stopping developing televisions altogether.

The Japanese conglomerate’s chief executive, Hisao Tanaka, and a string of other senior officials resigned in July in the country’s biggest accounting scandal in years.  An inquiry found that he had set up a pressurised corporate culture that prompted business heads to manipulate figures to meet targets.

The pressure increased when top managers set unrealistic targets for new operations because they were worried about the impact of the2011 Fukushima disaster on Toshiba’s nuclear division.