Toshiba Corp and its joint venture partner Western Digital Corp have made peace over the embattled Japanese electronics giant’s plan to sell its flash memory unit to raise cash to stay afloat.
The agreement allows Western Digital to participate in future investments in their joint venture, clearing the way for a consortium led by Bain Capital to buy Toshiba Memory Corp (TMC), the companies said yesterday.
The agreement also addresses concerns over protection of valuable patents and other intellectual property in the highly competitive field of flash memory products used in many high-tech products.
The two companies said the deal settles all disputes in litigation and arbitration over Western Digital’s objections to the planned sale of the companies’ NAND flash memory SanDisk Corp joint venture.
“The settlement represents the best possible outcome for all parties, clearing the way for the Bain Capital-led consortium to complete its acquisition of TMC as planned,” Bain Capital managing director in Japan Yuji Sugimoto said in a statement.
The two companies said they would jointly invest in a new computer chip fabrication unit at their joint venture in central Japan and in another facility in northeastern Japan’s Iwate Prefecture.
The plan calls for TMC to eventually sell shares through an initial public offering.
“With the concerns about litigation and arbitration removed, we look forward to renewing our collaboration with Western Digital and accelerating TMC’s growth to meet growing global demand for flash memory,” said TMC president and CEO Yasuo Naruke, who is also a Toshiba senior executive vice president.
He said the plan would ensure TMC has the resources it needs to compete in the flash memory market, which is growing quickly with advances in artificial intelligence and networks for products that have Internet connections, known broadly as the Internet of Things.
Western Digital CEO Steve Milligan said that the arrangement with Toshiba adequately protects Western Digital’s interests.
Toshiba has said it hopes the sale, estimated at ￥2 trillion (US$17.6 billion), would close by the end of March.
It might have to clear further hurdles, such as possible anti-trust concerns.
Toshiba is inundated with losses related to its US nuclear operations at Westinghouse Electric Co, which filed for bankruptcy earlier this year.
Its decline, which worsened earlier scandals over bookkeeping and corporate governance, is one of the most dramatic downfalls of a modern Japanese company.
However, the company has said it expects to return to the black by the end of this fiscal year, in March.
In the meantime, it has struggled to avoid being delisted. Last week it raised ￥600 billion by issuing new shares with 60 overseas investment funds.
Boston-based Bain Capital Private Equity is one of the world’s leading investment firms.
The consortium it is leading includes government-backed Development Bank of Japan Inc and Innovation Network Corp of Japan, which is made up of 26 big-name Japanese corporate investors, including Sony Corp, Canon Inc, Toyota Motor Corp and Sumitomo Mitsui Banking Corp.
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
TECHNOLOGICAL RIVALRY: The artificial intelligence chip competition among multiple players would likely intensify over the next two years, a Quanta official said Quanta Computer Inc (廣達), which makes servers and laptops on a contract basis, yesterday said its shipments of artificial intelligence (AI) servers powered by Nvidia Corp’s GB300 chips have increased steadily since last month, should surpass those of the GB200 models this quarter. The production of GB300 servers has gone much more smoothly than that of the GB200, with shipments projected to increase sharply next month, Quanta executive vice president Mike Yang (楊麒令) said on the sidelines of a technology forum in Taipei. While orders for GB200 servers gradually decrease, the production transition between the two server models has been
ASE Technology Holding Co (日月光投控), the world’s largest integrated circuit (IC) packaging and testing supplier, yesterday announced a strategic collaboration with Analog Devices Inc (ADI), coupled with the signing of a binding memorandum of understanding. Under the agreement, ASE intends to purchase 100 percent shares of Analog Devices Sdn Bhd and acquire its manufacturing facility in Penang, Malaysia, a press release showed. The ADI Penang facility is located in the prime industrial hub of Bayan Lepas, with an area of over 680,000 square feet, it said. In addition, the two sides intend to enter into a long-term supply agreement for ASE to
RSS