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posted by martyb on Tuesday May 30 2017, @09:14AM   Printer-friendly
from the boom-bust-BOOM! dept.

Tech giant Samsung Electronics Co Ltd said on Monday it is considering adding NAND memory chip production capacity at its manufacturing base in China amid an industry-wide boom that will likely fuel record sales for memory suppliers.

Samsung, the world's biggest memory chip maker by sales, has already invested $7 billion in the Xi'an facility to make 3D NAND memory chips. The chips are used for high-end data storage products on electronic devices such as smartphones, personal computers and data servers, and their prices have surged in recent months as suppliers struggle to keep up with demand.

[...] Researcher IHS expects this year's memory industry revenue to jump 32 percent to a record $104 billion.

Recently, Western Digital sought to intervene in the sale of Toshiba's memory business, rather than purchase the division itself. Originally valued at $18 billion, Foxconn has bid $27 billion and Broadcom bid $28 billion.

Western Digital, through its SanDisk subsidiary, is seeking arbitration to prevent Toshiba from selling off its stake in their flash memory joint venture without the consent of Western Digital. [...] Western Digital does have leverage in their preexisting relationship with Toshiba as co-owner of their flash memory joint venture. Western Digital is alleging that Toshiba is required to obtain Western Digital's consent before spinning off or selling Toshiba Memory, and that Toshiba's actions so far have violated their agreements with Western Digital. Western Digital has initiated arbitration proceedings against Toshiba, seeking to block further action without Western Digital's consent and to reverse the Toshiba Memory spin-off.

Original Submission

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Toshiba Sues Western Digital as it Seeks to Sell its Memory Business to a Third Party 1 comment

Toshiba wants to sell off its memory business, but not to Western Digital (just yet):

Toshiba was hoping to complete a deal with the winning bidder at a shareholder meeting yesterday. In the weeks leading up to that meeting, Toshiba had to issue several reminders of how desperate their financial state is: disclosing new legal actions against them by investors seeking damages pertaining to Toshiba's accounting scandals, announcing that the Tokyo and Nagoya stock exchanges are moving toward delisting Toshiba, and revising their outlook for fiscal year 2016 to reflect a negative shareholder equity of (¥581.6B). Meanwhile, Western Digital reiterated their objection to Toshiba selling the memory business to a third party and warned several third parties that they would view participation in the sale as tortious interference. Most recently, Western Digital also reportedly resubmitted its bid for Toshiba's memory business with an offer around ¥2 trillion, close to the amount offered by the consortium Toshiba had previously selected as the preferred bidder. Toshiba for their part has made no mention of Western Digital's offer.

In the aftermath of yesterday's shareholder meeting, Toshiba made several announcements. As expected, Toshiba was not able to finalize a sale of the Toshiba Memory Corporation subsidiary they have consolidated the memory-related assets under, but they are continuing to negotiate with the consortium. Toshiba announced plans for further investment in the joint venture's Fab 6 in Yokkaichi, Japan, and questioned whether SanDisk would jointly invest in the 3D NAND fab. Toshiba also announced that it has filed a lawsuit in the Tokyo District Court against Western Digital alleging unfair competition and seeking an injunction and damages. Toshiba claims that Western Digital is exaggerating their consent rights and also alleges that Western Digital has improperly obtained Toshiba trade secrets by transferring some employees from SanDisk to Western Digital whom have access to Toshiba confidential information through the joint ventures.

Western Digital Announces 96-Layer 3D NAND, Including Both TLC and QLC
Toshiba Considers NAND Business Split; Samsung Delays Release of 4 TB SSDs
Broadcom and Japanese Government Considering Bid for Toshiba's Semiconductor Unit
Samsung Could Boost NAND Production Capacity, WD Intervenes in Toshiba Memory Sale

Original Submission

Chaos as Toshiba Tries to Sell Memory Business 15 comments

Some news outlets reported that Western Digital was close to acquiring Toshiba's memory business, but that had not been finalized as of Tuesday:

Toshiba Corp now favors a group led by Bain Capital LP and SK Hynix Inc to buy its prized semiconductor business, as it failed to bridge key gaps with its business partner and rival bidder Western Digital Corp, two people briefed on the matter said on Tuesday.

The dramatic twist in the sale process, beset by legal wrangling and revised bids, comes just a day before Toshiba's latest deadline. The Japanese conglomerate, which needs to sell the chip business to plug a huge hole in its finances, had been trying to seal a deal by Wednesday with the Western Digital group but now hopes to reach agreement with the Bain group by next week, said the sources, who declined to be identified as the talks were private.

A Toshiba spokesman said the firm could not comment on details of the talks. The parties have already missed two deadlines by Toshiba's banks, which want a deal to pump $18 billion or more into the company to pull it out of negative shareholder equity and prevent it from being delisted. Yoshimitsu Kobayashi, an external Toshiba director, told reporters earlier on Tuesday that although the deadline is important, it is also important that negotiations head in a good direction.

Apple, a buyer of Toshiba's NAND chips, reportedly threatened Western Digital with a boycott of its products if it took complete control of Toshiba's memory business. But it did offer $460 million in acquisition financing for a group including WD as long as WD remained a minority investor.

Update: Toshiba says it favors a bid from a group led by Bain Capital, but is still open to better offers.

Toshiba to focus on chip talks with Bain, but doesn't rule out other suitors

Start the Bidding War, Toshiba

Previously: Broadcom and Japanese Government Considering Bid for Toshiba's Semiconductor Unit
Samsung Could Boost NAND Production Capacity, WD Intervenes in Toshiba Memory Sale
Toshiba Sues Western Digital as it Seeks to Sell its Memory Business to a Third Party

Original Submission

Samsung Preparing to Build Another Memory Fab Near Pyeongtaek for $27.8 Billion 5 comments

Samsung Preps to Build Another Multi-Billion Dollar Memory Fab Near Pyeongtaek

Samsung has begun preparations to build another semiconductor production facility near Pyeongtaek, South Korea. The fab will produce various types of memory as the market demands, and if unofficial information is correct, the new fab may be larger than the adjacent fab that began operations last year.

At present the upcoming fab is called the P2 Project and it will be located adjacent to the existing fab near Pyeongtaek. Samsung has already started to establish infrastructure for the production facility — it ordered the construction of gas pipes for the new production facility in January and is expected to start other works shortly. ETNews reports that Samsung is looking at investing ₩30 trillion ($27.8 billion) in the new P2 Project facility, but does not elaborate whether the number represents total investments, or initial investments. ₩30 trillion is the total amount of money that Samsung has already invested and plans to invest in its existing fab near Pyeongtaek by 2021. Considering the fact that the P2 is in an early stage of planning, it is unlikely that the company has finalized its investments plans.

Related: Samsung Set to Outpace Intel in Semiconductor Revenues
Samsung Could Boost NAND Production Capacity, WD Intervenes in Toshiba Memory Sale
Samsung Plans a "4nm" Process
GlobalFoundries to Spend $10-12 Billion on a 7nm Fab, Possibly $14-18 Billion for 5nm
Samsung's Second Generation 10nm-Class DRAM in Production
TSMC Holds Groundbreaking Ceremony for "5nm" Fab, Production to Begin in 2020

Original Submission

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  • (Score: 1) by shrewdsheep on Tuesday May 30 2017, @07:53PM (1 child)

    by shrewdsheep (5215) on Tuesday May 30 2017, @07:53PM (#517853)

    Two stories in one submission. Don't know what to comment on.

  • (Score: 2) by frojack on Tuesday May 30 2017, @08:06PM

    by frojack (1554) on Tuesday May 30 2017, @08:06PM (#517866) Journal

    Western Digital does have leverage in their preexisting relationship with Toshiba as co-owner of their flash memory joint venture.

    Typically these things have first right of refusal built in, or some other method of dissolving the agreement. (You always plan for failure of joint ventures - success takes care of itself).

    As long as it is a joint venture of equal ownership it doesn't matter what a wiling buyer pays, Western Digital would still own its half (which by definition increased in value the minute the other half sells). They still would have gotten their half at a bargain.

    So I have to assume WD doesn't quite own half, OR they didn't do their due diligence when setting up this arrangement. Or, on the other hand they owned more than half, and they had too much control and were bleeding Toshiba dry.

    Trying to keep an unwilling partner in a joint venture is a fools errand. And there must be some significant unspoken nastyness going on here.

    No, you are mistaken. I've always had this sig.