UPDATED 05:31 EDT / JANUARY 26 2016

NEWS

Troubled Toshiba set to go all-in on NAND flash

Troubled Toshiba Corp., is set to exit the peripheral chip-making business and possibly even the disk business too, as it struggles to recover from a $1.3 billion accounting scandal that left the firm reeling financially.

The report comes by way of Reuters and Japan’s Nikkei news agency, which says that Toshiba is looking to offload loss making parts of its chip business, including its systems LSI (Large Scale Integration), micro-controllers, analogue semi-conductor chips, and discrete chips used in industrial machinery, vehicles, and domestic appliances.

Instead, a slimmed-down Toshiba will look to focus solely on the NAND Flash market, where it’s still profitable and occupies a healthy second place in the market behind Korean rival Samsung Electronics Co. Ltd.

Reuters says that Toshiba is hoping to generate around $1.68 billion from the sale of its non-core businesses, with this money earmarked for reinvesting in its flash business. Toshiba is looking to develop 3D NAND Flash products with extra chip capacity, with mass production for these slated to begin in March 2016. Meanwhile, the firm is building a new chip manufacturing plant that’s set to open in 2018.

Meanwhile, Nikkei goes further, saying that Toshiba could also sell off its disk drive manufacturing assets, where the company trails market leaders Western Digital Corporation (WDC) and Seagate Technology PLC by some distance in terms of revenue and unit production.

“Toshiba is not vertically integrated in terms of HDD heads and finished media, which compares to Western Digital and Seagate targeting internal supply to account for 80 per cent-plus (if not 90 per cent-plus) of required components,” said Aaron Rakers, MD of analyst firm Stifel Nicolaus, to Nikkei.

What this means is that Toshiba’s HDD manufacturing costs are much higher than those of its two big rivals, and those costs could increase further if the company decides to invest in developing helium-filled drives and/or ones using heat-assisted magnetic recording (HAMR) technology.

Toshiba’s disk business employs some 8,000 workers, and layoffs are likely to occur at its Philippines-based HDD plant if it decides to scale down or exit the business completely.

Image credit: Dean Bostock via flickr.com

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