Toshiba is considering spinning off its semiconductor operations and selling a stake to Western Digital as it tries to cope with the cost of writedowns at its US nuclear power unit, the Nikkei Review reports. The chip business could be spun out in the first half of this year, and in addition to WD, investment funds are showing interest in becoming shareholders, unnamed sources familiar with the matter told the paper.
The company is expected to sell around a 20 percent stake for JPY 200-300 billion (USD 1.77-2.65 billion). It would retain a majority stake and still consolidate the company. The unit could seek a stock market listing later.
The deal would give Toshiba short-term funds, while also allowing the semiconductor business to raise financing for capex and R&D on its own. Toshiba and Western Digital already operate a flash memory plant together in Yokkaichi, Japan. Memory chips accounted for the majority of the JPY 1.57 trillion in sales of Toshiba's semiconductor operations in fiscal 2015.
