Why is Toshiba's Memory Chip Business so Valuable?

21 September, 2017, 00:58 | Author: Franklin Nunez
  • The logo of Toshiba Corp is seen behind cherry blossoms at the company's headquarters in Tokyo Japan

Dell Inc., Kingston Technology Company, Inc., Hoya Corp and SK Hynix Inc.

Apple is interested in the chip unit because of the strategic importance of flash memory. A number of major tech companies showed an interest in the deal, including Foxconn and Apple Inc., and Toshiba ultimately decided on a consortium of that included several businesses that use its chips in their products.

But one of sources speaking on Wednesday said Toshiba and Western Digital had failed to agree on limits to the USA firm's future stake in the chip business that had been demanded by the Japanese company. Toshiba needs cash by March to prevent it from being delisted from the Tokyo Stock Exchange.

The sale of the Toshiba memory chip unit should remove the looming threat.

Deaf Singer Mandy Harvey Impresses in 'America's Got Talent' Season 12 Finale
America's Got Talent Season 12 finalists had one last chance Tuesday to show America why they deserve to win. The victor of America's Got Talent will be announced on Wednesday, September 20 at 8pm on NBC .

In response to the MOU, Western Digital said it was surprised Toshiba would look to do a deal with Bain "without SanDisk's consent, as the language in the relevant JV agreements is unambiguous, and multiple courts have ruled in favor of protecting SanDisk's contractual rights".

Shares of Western Digital were down more than 4 percent in pre-market trading. To complete the sale, Toshiba may have to overcome continued resistance from joint venture partner Western Digital. SanDisk is a joint-venture partner in producing the chips with Toshiba and as a result of its purchase, Western Digital has a joint-venture manufacturing agreement with Toshiba.

USA private equity firm Bain Capital will lead the worldwide consortium, along with other investors such as Apple, which has reportedly invested at least $3bn. Similarly, a bid led by equity group KKR and Western Digital did not progress.

Things, however, fell through a day before Toshiba made the final decision.

Russia's Rosneft eyes Iraqi Kurdistan gas pipeline deal
Iran-backed Iraqi Shi'a militias have threatened to dislodge the Peshmerga from Kirkuk should the Kurds proceed with the vote. The Turkish cabinet and Turkish national security council have scheduled meetings on Friday to consider possible action.

Media reports circulated that, under the new proposal, Bain had partnered with SK Hynix and brought in USA tech firms such as Apple and Dell, who are both buyers of Toshiba chips, to bolster the offer that is reportedly worth some $22 billion U.S.

The auction has gone through dizzying twists and turns.

Toshiba and the Bain-led consortium on Sept. 13 signed a memorandum of understanding to speed up their negotiations, with a view to reaching a deal by late September. But the MOU didn't preclude Toshiba from continuing to negotiate with other bidders.

The consortium has put forward an acquisition offer of some ¥2.4 trillion, including funds for equipment investment.

Trump Makes First Speech to UN General Assembly This Week
He is expected, over the next several days, to stay at Trump Tower, where he plans to hold meetings with foreign leaders. Trump may also face some uncomfortable moments over his sharp criticism of the Iran nuclear deal .

Bain Group revised its offer, by seeking financial support from Apple. Apple, Dell and other U.S. tech firms have also reportedly joined the consortium.

Recommended:



Popular

At least one shot at Mattoon high school shooting
All other students were evacuated to a nearby elementary school, and police said everything is under control. The Mattoon Journal-Gazette reports that the shooting occurred at about 11:30 a.m.

Wall St hits new record highs as financials, industrials gain
In overseas trading, stock markets across the Asia-Pacific region turned in a lackluster performance during trading on Wednesday. Telecom stocks are seeing notable strength, however, with the NYSE Arca Telecom Index climbing by 1.1 percent.

Led coalition denies Syrian outpost closure is part of deal with Russian Federation
Ryan Dillon told reporters last week, referring to the regime and SDF offensives in Deir Ezzor province. During the siege, warplanes could not take off from or land on the base as IS would target them.

Trai cuts termination charge on mobile voice calls; Reliance Jio to gain
Effective October 1st, TRAI has reduced IUC charges to 6 paise/minute from the existing 14 paise/minute. Jio also stated that it is of the opinion that waiving the charge will benefit consumers.

Russian gunship fired accidentally at onlookers
It said it happened Sunday or Monday at the Luzhsky range, about 100 kilometers (60 miles) east of the border with Estonia. Russian Federation launched short range ballistic missiles, naval forces, and its newest Ka-52 attack helicopters.

Wonderful Kid - Jurgen Klopp Happy With Liverpool Star's Attitude
We sat together with him and the analysts and showed him how we want him to play in this position and that position. However, Klopp says there is little he can teach to players like Sturridge, even if the goals are not flowing.

Paul 'worried' about new ObamaCare repeal bill
The GOP needs at least 50 senators to vote for the bill, which would then have to be considered by the House of Representatives. There's no chance the bill will get 60 votes, and the CBO says it can only provide a few rough numbers by September 30.

President Trump Reneges Paris Agreement Withdrawal
Staying in the accord is not out of the realm of possibility if that happens, as the Secretary of State said on Sunday, Sep.17. After being directly asked, Mr Tillerson said the U.S. could remain the accord "under the right conditions".

North Korea will be 'destroyed' if 'reckless behaviour' continues, promises United States ambassador
Nikki Haley said the sanctions need time to work and maintained hope that Pyongyang would return to the negotiating table. The United States is the single largest funder of the U.N., contributing 22 percent of the U.N. budget.

Sardar Sarovar Dam: Five points to know
This project, the PM said , sets new records and new benchmarks. "But we were determined not to take make it a political battle". The World Bank, which had agreed to fund the project earlier, had also withdrawn later, citing environmental concerns.