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timeline of Toshiba's forced memory sale

salami slicing Toshiba's SSD beauty pageant - timeline of stories

from the fallout of nuclear and geo political tussles to final approval

by Zsolt Kerekes, editor

One of the ever present background stories in the SSD market in 2017 was the forced sale of Toshiba's memory business.

This web page includes snippets of that coverage from the news archive on and will be updated until the outcome is determined one way or the other.
layers and toppings make a difference to 3D nand

SSD history / SSD news
an SSD view of memory boom bust cycles
list of SSD company acquisitions since 2000
consequences of the 2017 memory shortages...
Toshiba's semiconductor business rescues company
Editor:- January 25, 2017 - Toshiba was featured in the mainstream news media last week due to losses by its US nuclear power business which had been responsible for halving the value of shares in the company. Reports that Toshiba's financial fix centered around selling part of its semiconductor business to Western Digital got a good reaction from markets.
is Toshiba salami slicing its memory heirloom?
Editor:- February 14, 2017 - Toshiba has today, again, topped mainstream media tech headlines due to the resignation of the company's chairman. In recent weeks - were I so inclined (to fan the flames of rumor) - I could have inserted some story or other about the sale of Toshiba's semiconductor business in this news page every day.

Instead I came to the conclusion that the real story was that there probably wouldn't be a single big story because the sale of the entire memory systems business to a single buyer (most likely another memory or SSD company) would inevitably introduce a delay due to antitrust hurdles. And Toshiba needs financial bandaids now.

Therefore, what we've been seeing is a fragmented approach - which on linkedin I described as "salami slicing" the memory business heirloom. Western Digital got some - but no one will get it all quickly due to caution about the impact of regulator antiacid.
Toshiba was fastest growing SSD vendor in 2016
Editor:- March 8, 2017 - The flash business unit of Toshiba - which may be called something different depending when you read this - has announced that its SSD business was the 4th largest by market share and the fastest growing (year on year) in 2016 according to data in a report - Worldwide Solid State Storage Quarterly Update, CY 4Q16 ($40,000) - published recently by IDC.

See also:- storage market research
who will make enough flash?
Editor:- March 14, 2017 - A fab capacity view of the flash industry's ability to meet demand for memory this year is presented in - Shootout At Yokkaichi - the NAND Industry at the Crossroads by William Tidwell, Semiconductor Analyst who regularly writes about such things on Seeking Alpha.

Among other things Bill discusses the state of production maturity within the major memory companies in their transitions to 3D and says:-

"Industry productivity is still low due to a condition that could be called planar overhang - that being the amount of planar capacity that must be converted as fast as possible to 3D, so the company can take advantage of the denser 3D process. Unfortunately, this conversion process from planar to 3D is basically like buying a house that has to be completely renovated and then finding out that load-bearing walls are involved - and the foundation has to be reinforced."

The article's central theme is the imminent auction of Toshiba's flash assets, the main competitors and possible bidders, winners and losers.

Along the way you get a good feel for the investment and production dynamics which will shape the next few years of this industry. the article

historical timeline of 3D NAND flash memory

will there be enough flash to replace enterprise HDD?

boom bust cycles in memory markets - lessons for SSD

nand flash memory and other SSDward leaning nvms too
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Toshiba's storage sale - update from Tom Coughlin
Editor:- April 4, 2017 - As previously reported Toshiba's memory and SSD business will be spun off to generate cash to plug losses in its nuclear generating business. A new article by Tom Coughlin, President Coughlin Associates - HDD Implications of Toshiba Memory Unit Sale - looks at the ramifications (no pun intended) for the hard drive market depending on which of the 10 or so potential bidders succeeds.

Among other things Tom says - "Selling the HDD unit along with the flash unit could be one outcome... The end result could be very interesting and create very strange bed-fellows." the article
Sampling the engineering temperature in Toshiba's never never land
Editor:- April 30, 2017 - Speculation about who might become next owner of Toshiba's SSD and memory business continues... As I told you earlier this year I didn't expect this to be a short story, due to monopoly and other strategic interests.

The latest chapter in this flash novella comes as the number of buccaneers circling around the foundering wreck of Toshiba's corporate galleon and hoping to pluck the semiconductor gold IP fabs from its belly has reduced to 4.

A new blog - Politics Muddy Toshiba Bidding by Junko Yoshida , Chief International Correspondent - EE Times - takes an engineering view of who would be the best or worst of the bidders and asks...

"Are Toshiba's semiconductor engineers angry? Are they discouraged?" the article
Toshiba's memory business sale - tensions in the timing
Editor:- May 15, 2017 - progress updates about the sale of Toshiba's SSD and memory business have been part of the underlying news fabric during the first half of 2017. Tensions in the timing and conclusion of a prospective sales come from various causes:-
  • Toshiba needs the promise of a buyer as soon as possible to avert further downgrading of the parent company due to losses in other markets.

    An additional urgency is that the memory market was in a boom at the start of the spin-off process - with prices for memory rising.

    If the market changes back to oversupply or if other factors reduce the premium value placed on raw flash - before an acquisition is agreed - then the value of the business will be less.

    Delay therefore works to the advantage of a buyer and to the disadvantage of the seller.
  • The size and strategic nature of the transaction means that geo-political considerations and anti-trust hurdles will play big part in the decision process.

    If the potential buyer triggers a monopoly investigation in their own operating markets then delay in the acquisition is inevitable and could take upto a year.
  • A complicating factor is that Toshiba shares considerable flash wafer fab assets and IP with Western Digital which were part of arrangements evolved in partnership with SanDisk -which WDC acquired in 2015.

    In the current situation where Toshiba's memory business is for sale - there could be significant differences in self interest between WDC and any future owner of the Toshiba memory, SSD and HDD business.
In that context these reports about WDC's growing unease can be more easily appreciated:-
  • Nikkei Asian Review (April 21) - "Western Digital remains opposed to any sale of Toshiba's memory unit to a third party."
  • FT (May 15) - "Western Digital is taking its row with Toshiba to the International Court of Arbitration, as the US storage technology group tries to prevent what it claims is a breach of the terms of its joint venture with the embattled Japanese conglomerate."
Editor's comments:- It's clear that in the matter of who buys Toshiba's memory, SSD and HDD business the strategic and business self interests of WDC and Toshiba (parent company) are different.

But what would be best for the industry?

My own view is that if WDC succeeded in acquiring all of Toshiba's memory and SSD assets in 2017 or 2018 the effect would be to reduce the ability of the SSD market to be as competitive internally and also (although less important) reduce the ability of the SSD market to compete as aggressively with the hard drive market.

Another factor is the effect of competition inside the memory market and the effect on the emerging market for tiered big memory.

This is a market which is working to the benefit of users because there are pressures for flash to displace DRAM and a market climate which is nurturing the growth of new nvms which (although small in revenue terms now) could in the long term displace a fraction of the flash or DRAM markets.

In 5 years time such an acquisition (a major memory supplier being acquired by one of the two remaing hard drive companies) may not matter so much - because the SSD and memory systems market will have moved to new levels of efficiency and systems level utilization. But right now - I can see more negatives than positive for a competitive SSD market if such a deal were to go ahead.
"In this period even non technical people who couldn't name a single SSD product from the Western Digital stable would be aware from a wide range of media outlets that it had a stakeholder interest in the sale of Toshiba."
the Top SSD Companies - Q1 2017 (May 19, 2017)
Toshiba - update on the suitors
Editor:- May 25, 2017 - A report in the Japan Times says "Toshiba has told its creditor banks that it will be difficult to select joint venture partner Western Digital as the buyer of its chip business."

A news story in Nikkei names the 4 other companies still interested in buying Toshiba's memory unit as:- KKR, SK Hynix, Broadcom and Foxconn.
despite $27 billion bid - Foxconn considered a longshot
Editor:- June 5, 2017 - In Apple, Amazon to Join Foxconn's Toshiba Bid a blog on EE Times - Jim Handy founder of Objective Analysis says he expects the alliances and investing parties may change around before the final deal is struck.
Toshiba's directors choose Japan based consortium as buyers of memory business
Editor:- June 21, 2017 - the long running speculation about who's going to buy Toshiba's memory business may soon be over.

Toshiba today announced its board of directors have resolved to select the consortium of Innovation Network Corporation of Japan, Bain Capital Private Equity LP, and Development Bank of Japan a preferred bidder in respect of the sale of Toshiba Memory Corporation.

Toshiba said its intention is to reach a mutually satisfactory definitive agreement with the Consortium by the date of its annual ordinary general meeting of shareholders, scheduled for June 28.
Toshiba samples QLC says it will sue WDC
Editor:- June 28, 2017 - Here are 2 news stories about Toshiba.

Toshiba said yesterday that it is sampling the world's first 3D (64-layer), QLC (quadruple-level cell) flash memory to SSD controller makers for characterization.

The 768Gb chips are believed to be the highest density nvms currently available from anyone.

Editor's comments:- this is an extraordinary achievement for the nvm market. And you can judge how difficult it has been by comparing the actual timing to the earliest optimistic market expectations.

In February 2008 - Lane Mason - who at that time was at Denali Software and was one of the few people on the planet writing about such detailed matters - said - in the Denali blog - the industry expected the transition to 4-bit MLC cells, by 2012. So it has taken 5 years longer. (Lane is now at Objective Analysis BTW.)

The other Toshiba news story - Toshiba Misses its Deadline for a Deal for its Microchip Unit (NY Times) - is another episode in the much delayed (although not as much as QLC) serialization of the sale of Toshiba Memory - which many viewers had mistakenly believed had already publicly aired its season 1 finale. Among other things the NY Times article says this...

"Toshiba said it was suing Western Digital for about $1 billion over its attempts to block the sale of the chip unit..." the article
WDC secures advance warning of Toshiba nand asset changes
Editor:- July 14, 2017 - Western Digital annnounced today it has obtained a court order to prevent Toshiba transferring its interests in jointly held nand flash assets without giving prior notice to WDC's SanDisk subsidiary (which shares some of these resources) "to ensure that the issue is preserved for arbitration."

A follow up story in Japan Times clarifies that the notice period is "2 weeks" and furthermore says "Toshiba lawyers have contended in court documents that any sale of the chip division was not expected to close until early next year, at the earliest."
more updates on WDC's dancing around Toshiba's memory business
Editor:- September 6, 2017 - here's a noise filtered reduced summary of recent news reports about the continuing saga of Toshiba's forced memory business sale.

Reuters (September 1, 2017) quoted extracts from a letter written by WDC's CEO to Toshiba - in August - which regrets the "significant ill will" felt by Toshiba caused by tensions between the 2 companies which have arisen as a result of the sales process.

Among other things WDC employees had been locked out of Toshiba plants and databases which had shared ownership in July according to a report by Silicon Valley Business Journal (July 19, 2017).

Coming up to date (September 6, 2017) Nikkei reported that WDC "has asked to buy some chip production capacity at fabrication facilities in Yokkaichi, Japan, in which it jointly invests with Toshiba" to guarantee its share of memory chips produced at the plant.

This nice legalistic distinction of owning machinery is described as a possible way to avoid delays in transferring funds to Toshiba which a would be inevitable due to regulator scrutiny if WDC were to purchase the company.

A fascinating noisier picture of how WDC and Toshiba have been dancing around these issues in recent weeks can be seen in this new (September 5, 2017) timeline on SeekingAlpha - WDC and Toshiba - Why This Time Is Different.
For samples of the mood music reported around Apple's interventions in the memory see WDC asks Apple to join its bid for Toshiba (Sept 6), Apple says it won't buy Toshiba products if WDC gains control (Sept 8).
miscellaneous consequences of the 2017 memory shortages
"Western Digital's Strength Revealed by Apple's Tantrum"
headline of a blog on (September 11, 2017) reporting an analyst opinion from BTIG Research

Editor's comments:- In this context the rights to access memory supplies is like access to water rights in arid zones. I'm thinking - the Big Muddy in the Big Country (the western starring Gregory Peck).
Toshiba says it will sell memory business to Bain led consortium
Editor:- September 20, 2017 - Toshiba today announced its long awaited decision about who it has chosen to sell its memory business to. It's a consortium led by Bain Capital using an acquisition cutout filter created for this purpose called K. K. Pangea. The transaction (worth about $18 billion) is "expected to close by the end of March 2018."

Editor's comments:- earlier reports which had speculated about the identity of members of the consortium named at various times Dell, Apple and Seagate.

Toshiba said in the above announcement "Western Digital has sought to prevent the sale of the interests of the joint parties (meaning Toshiba and WDC) to any 3rd party and Toshiba and WDC are currently engaged in litigation and arbitration."

An article on Bloomberg about the announced sale process says "The consortium members weren't named in Wednesday's statement to the Tokyo Stock Exchange."
Toshiba and Western Digital bury the hatchet over flash
Editor:- December 13, 2017 - Toshiba and Western Digital today announced a global settlement agreement to resolve their ongoing disputes in litigation and arbitration, strengthen and extend their relationship, and enhance the mutual commitment to their ongoing flash memory collaboration.

The parties' agreement to resolve all outstanding disputes ensures that all parties are aligned on Toshiba's sale of TMC to K.K. Pangea, a special purpose acquisition company formed and controlled by a consortium led by Bain Capital Private Equity, LP ("Bain Capital"). The parties have agreed on mutual protections for their assets and confidential information in connection with the sale of TMC, and on collaborating to ensure the future success of TMC as a public company following an eventual IPO.
Toshiba memory sale reenters What If? zone
Editor:- April 24, 2018 - The sale of Toshiba's memory business still has the potential to unravel according to various reports which note that regulatory delays have delayed completion of the deal with Bain (announced September 2017) into a different market territory in which Toshiba's parent no longer needs the proceeds to remain solvent and the value of the flash memory memory business is not the same as it was.
  • JapanTimes - "Toshiba and Bain want to finalize the current agreement, but they can't wait forever..."
  • Electronics Weekly - "Activist investor Argyle Management of Hong Kong says the memory unit could fetch $40 billion in an IPO, whereas the Bain/Hynix sale will only bring in $18.6 billion."
  • ZDNet - "...the tech giant has missed a deadline of March 31, due to Chinese antitrust regulators, which are yet to permit the acquisition to take place."
timeline of Toshiba's forced memory sale
can memory chips be made in the wrong place?
Zsolt Kerekes, editor - - April 30, 2018
Is a memory chip in Country A worth the same in Country B?

If supplies were plentiful, and if there was efficient and effective competition, and low barriers to free trade and market entry - then the answer would be:- Yes.

Superficially enough of those conditions seemed to prevail worldwide upto about 3 years ago that if anyone had tried to create a new mainstream civilian memory company (in the DRAM or nand flash markets) then the effort would have been viewed as maybe being nuts. Why bother? There would have been little appetite to invest in such a new semiconductor venture. The IP barriers alone were strong enough to deter such efforts and the risks and rewards from the competitive side (plentiful cheap memory and "forever downwards - like gravity" price projections) would have been sufficient deterrents to such investments.

Now fast forward to today.

The supplier position power exposed by the memory shortages coupled with geopolitical sensitivities which received serious airing and analysis in the 2017 beauty pageant of who might be a fit buyer of Toshiba's memory business exposed the strategic sensitivities of the memory business.

And recent actions by US regulators to block technology sales to significant China based technology companies which fell afoul of well known US sanctions on 3rd party countries (for example ZTE survival at risk amid US ban - said while ZTE says US penalties are 'unfair'- said coupled with the recalculation of value effect inevitably inspired by asking what would happen if something like recently imposed US tariffs on photovoltaics were to be applied on memory chips by any country for any reason - is creating a climate in which the Country A versus Country B question may change the assessment of investing in new memory companies to include a stronger weighting to the geographic question of where the customers are compared to the factories which make the chips.

I'm also assuming here that another factor in reopening this type of question is that the imbalance between memory supply and demand may have changed from its historic pattern of quickly rebalanced balance - to becoming (for maybe several more years yet ) - unplentiful and higher priced memory becoming the new normal. Here are some articles which discuss the temperature of thinking.
  • A blog on AnandTech - Chinese DRAM Industry Spreading its Wings: Two More DRAM Fabs Ready (April 25, 2018) - says "Innotron Memory and Fujian Jin Hua Integrated Circuit, are gearing up for volume production of computer memory in the coming month. Both manufacturers were founded with the help of the Chinese government, their output will initially be consumed locally."
Older readers will remember that the question of whether memory chips might need passports and visas to travel from one part of the world to the other (and the related question of what kind of buyer reception these coach class chip tourists would get when they arrived) was for many decades the norm. It was only in the dotcom era that we got used to just in time inventories for manufacturing and the free movement of consumer grade technology parts zigzagging their way around the factories of the planet like the shadows of drunken satellites.

Maybe there isn't enough effective competition in the memory market and it took the lack of headroom in supply to show our vulnerability to these strategic links and dependencies.

news:- May 17, 2018 - Toshiba Corp said it has received all required regulatory approvals for the sale of Toshiba Memory Corp. The sale to the Bain led consortium is expected to close on June 1, 2018.

I hope you found the above collection useful.

This story hasn't ended yet. And I'll add more stories later.

For more reading see:- SSD market analysts, popular SSD articles, nvm news
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