It’s reported that Western Digital is the leading candidate purchase the minority share, with Reuters saying that the company could take a 20 percent stake. This would still leave Toshiba with 80 percent of its profitable business.
"Toshiba has positioned the memory business as a focus business where timely investments, accelerated development time and the ability to ramp-up the production of large capacity, highly reliable 3D memory devices (BiCS FLASH) are essential to meet growing demand for storage," Toshiba said today in a statement. "Splitting off the memory business into a single business entity will afford it greater flexibility in rapid decision-making and enhance financing options, which will lead to further growth of the business and maximize the corporate value of Toshiba Group."
Toshiba informed shareholders that it wishes to hold a meeting in late March to discuss approving the company split, with an effective date for the transaction taking place on March 31st. Detailed information regarding the split is hard to come by at this time, as the shareholder note is surprisingly lacking in specifics.
Although Western Digital hasn’t been officially named as the buyer, the company is perfectly positioned to take advantage of such a deal. Western Digital not only manufactures its own NAND flash memory chips, but it also produces its own SSD products. The company could use economies of scale to use the NAND chips its own products, like the economical WD Blue SSDs that we recently reviewed. Toshiba and Western Digital also already jointly operate a massive NAND flash facility in Yokkaichi, Japan, which celebrated its grand opening in July 2016.
Toshiba is currently desperate for cash, as it is still licking its wounds after an embarrassing $1.2 billion accounting scandal, in which it wildly inflated its earnings over a seven-year period. Toshiba could raise upwards of $1.7 billion according to Reuters.