Memory Giant Toshiba To Be Acquired After Years of Highs and Lows

Toshiba has been a household name in the electronics industry for over a century. Throughout this time, the company has been at the forefront of technological innovation, specifically in the memory space, where Toshiba is one of the industry’s largest players.

Toshiba's logo at the company's Kawasaki, Japan, site. Image courtesy of Reuters/Kim Kyung-Hoon

Despite its successes, Toshiba has also faced its share of challenges over the years. Now, Toshiba’s volatility has finally come to a head: last week, the company announced that it will be acquired by Japan Industrial Partners (JIP) in a deal worth $15 billion.

In this article, we’ll take a look at some of Toshiba’s recent business history, some of its most notable innovations, and what the acquisition means for the memory industry.

Toshiba's Longstanding History of Electronic Innovation

Toshiba was first founded in 1875 in Japan, and since then, it has proved as a major contributor to the global technological community, specifically in the semiconductor memory market, where some of its most noteworthy innovations include:

• The "world's first" 256 Gb, 48-layer BiCS Flash chip
• 3D NAND Memory technology for improved bit density in NAND Flash

In 2015, Toshiba released the so-called world's first 256 Gb, 48-layer BiCS Flash. Image (modified) courtesy of Toshiba

Toshiba has also made major contributions outside of the memory industry, including:

• Power ICs for automotive safety
• Silicon multipliers for automotive LiDAR
• Triple-gated IGBTs for faster switching and more efficient power electronics

While this list is not exhaustive of all of Toshiba's feats, it demonstrates the breadth of Toshiba's influence across many fields and product categories.

A Series of Business Downturns

Despite these technological successes, Toshiba has been struggling as a business for several years. 

In 2006, Toshiba attempted to become develop world standard-setting nuclear reactors after acquiring the American power plant Westinghouse. The nuclear disaster at Fukushima in 2011 then led Toshiba to insolvency. 

Since then, Toshiba has faced multiple financial issues, including massive accounting fraud in 2015 and a subsidiary scandal in 2020. During this time, Toshiba also sold its profitable computer memory chip business to a consortium led by Bain Capital for $18B. The sale was part of a broader restructuring effort aimed at shoring up the company's finances. 

After prolonged management turmoil and negative net worth caused by the losses from nuclear and shareholder conflict, Toshiba announced in 2021 that the company would split into three individual entities. As covered by AAC contributor Lianne Frith, Toshiba’s strategic reorganization marked the first-ever spin-off scheme for a Japanese company of its size and was done with the intention of refocusing individual sectors of the company. The separation plan was unanimously approved by the board. 

Toshiba To Be Acquired

Last week, Toshiba made headlines in the semiconductor industry with the announcement that its board accepted a buyout offer for $15.2B.

Searching for help, Toshiba began an auction process about a year ago, from which it received eight initial buyout proposals and two offers for capital alliances. Four bidders proceeded to a second round, including private equity firms Bain Capital, CVC Capital Partners, and Brookfield Asset Management. But finally, after a year of this process, Toshiba’s board has accepted an offer from the JIP consortium.

The JIP consortium bid was called "the only complete proposal" submitted during the one-year competitive auction process. Approximately 20 Japanese companies, including financial services firm Orix Corp, chipmaker Rohm Co, and Chubu Electric Power, plan to participate in the deal.

For Toshiba, the deal signals a brighter future ahead, where some financial stability and increased resources can help the company return to its former glory. As for the semiconductor market, the acquisition can be viewed as positive, enabling the future survival of one of the leading players in memory and ensuring that Toshiba can continue to innovate and contribute for years to come.