Executives at crisis-hit Toshiba Corp yesterday faced hundreds of angry shareholders as the firm announced it has not yet clinched a deal to sell its prized chip business to a consortium of US, Japanese and South Korean investors.
The sale, reportedly worth about ￥2 trillion (US$17.87 billion), is seen as crucial for the cash-strapped company to plug massive losses at its US nuclear division, Westinghouse Electric Corp.
Last week, Toshiba said it had entered into exclusive talks with Japanese private-public partnership Innovation Network Corp, state-backed Development Bank of Japan Inc and US private equity fund Bain Capital, with South Korean chipmaker SK Hynix Inc acting as a lender.
The company had hoped to announce the sale before the meeting, but yesterday said that negotiations were still continuing.
“It is taking time to reach a consensus because the consortium comprises multiple parties,” it said in a statement. “Toshiba intends to continue the negotiation toward reaching a definitive agreement at the earliest possible date.”
Toshiba is the world’s No. 2 supplier of memory chips, behind South Korea’s Samsung Electronics Co.
The sale involving state-backed buyers means the Japanese government would effectively own the chip division.
Japan had concerns about losing a sensitive technology amid questions about security around systems already using Toshiba’s memory chips, which are also widely used in data centers.
The profitable division has accounted for about one-quarter of Toshiba’s total annual revenue.
The multibillion-dollar losses at Westinghouse have raised doubts about the future of Toshiba, one of Japan’s best-known companies, which is still recovering from a 2015 accounting scandal.
The firm is now probing whistle-blower claims of financial misconduct by senior managers at the US nuclear unit.
Toshiba has repeatedly delayed the release of its long-overdue earnings data, saying it needed more time to gauge the impact of Westinghouse on its balance sheet.
Toshiba said it has so far found no evidence to warrant criminal charges against Westinghouse executives.
“I apologize from the bottom of my heart to shareholders and other stakeholders,” Toshiba chief executive officer Satoshi Tsunakawa told investors yesterday.
The chip unit sale is seen as key to Toshiba’s turnaround, but it could still face a roadblock. US-based partner Western Digital, which jointly runs a key chip plant in Japan, opposes the sale.
Tsunakawa blasted the US firm’s bid for a court injunction as “unfair interference.”
Toshiba later said it has filed a ￥120 billion lawsuit against its US partner over the disputed deal.
Tsunakawa dismissed the possibility of liquidating the more than 100-year-old pillar of corporate Japan, just days after scandal-hit airbag maker Takata Corp filed for bankruptcy protection.
“We will do everything we can to avoid such a situation,” he told about 1,000 investors at the meeting.
Shareholders were unimpressed.
“Toshiba is in a state of emergency,” one investor said. “This company needs strong leadership that is capable of making the right business decisions.”
“Toshiba is becoming a third-rate company,” another investor said.
The firm’s hard-hit stock, which yesterday fell 1.84 percent to ￥287.6, is on a watch list for possible delisting from Japan’s premier exchange.
Hidesato Maekawa, a 78-year-old textile factory owner, seemed resigned to be stuck with Toshiba’s stock, which is down about 35 percent since late last year.
“Now that I have held the stock this long, I might was well keep it even if turns into a worthless piece of paper,” he told reporters before the meeting.
Even before the problems at Westinghouse, Toshiba’s reputation was badly damaged over separate revelations that top company executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.
Toshiba — which has more than 180,000 employees globally — once touted its overseas nuclear business as a future growth driver, filling a hole left after the 2011 Fukushima Dai-ichi nuclear power plant disaster slammed the brakes on new nuclear projects in Japan.
However, delays and cost overruns hit Westinghouse’s finances hard as the global outlook for the nuclear business weakened.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
MAJOR CONTRIBUTOR: Revenue from AI servers made up more than 50 percent of Wistron’s total server revenue in the second quarter, the company said Wistron Corp (緯創) on Tuesday reported a 135.6 percent year-on-year surge in revenue for last month, driven by strong demand for artificial intelligence (AI) servers, with the momentum expected to extend into the third quarter. Revenue last month reached NT$209.18 billion (US$7.2 billion), a record high for June, bringing second-quarter revenue to NT$551.29 billion, a 129.47 percent annual increase, the company said. Revenue in the first half of the year totaled NT$897.77 billion, up 87.36 percent from a year earlier and also a record high for the period, it said. The company remains cautiously optimistic about AI server shipments in the third quarter,
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.
RSS