B1 Intermediate UK 58 Folder Collection
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We're looking over in Asia of the potential sale of Toshiba's memory chip unit,
and many have felt that this was really the jewel in their crown.
But you've been writing it actually might be the right time to get rid of this.
Yeah, exactly. I'm one of the many people who do feel that it is a jewel in their crown,
given that they've got this nuclear scandal that's going on, that's really hurting their financials.
They're going to have to take a loss on it.
But in the Gadfly column, I wrote, in the last 24 hours, I do argue that the issue here for Toshiba and the chip business is,
we may be hitting peak memory.
What they're doing is making memory chips the most prevalent type of chips.
It's very much a commodity chip, and what we're seeing now in China is that there's a lot of new upstarts, competitors,
who are spending a lot of money to build capacity,
like incredible amounts of money—we're talking billions and billions of dollars over the next few years—to build capacity.
And in a commodity business like memory chips, when there's a lot of extra capacity,
oversupply can lead to falling prices, and it becomes this vicious cycle of lower prices, making it very difficult to make profits.
And in fact, ironically, one of the ways that you have to deal with that
is to turn out more chips just to create revenue to help cover the depreciation cost.
So really, there's a big risk to anyone in the memory industry over the next few years,
as all this new supply comes online in China, in the next 2 to 3, 4 years.
And this may be a great time for Toshiba to get out of that business and to sell to somebody who wants to be in the business.
Well, maybe Toshiba hoping that Foxconn and, indeed, some of the other potential buyers aren't reading your Gadfly column.
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Why It’s a Good Time for Toshiba to Sell Its Chip Unit

58 Folder Collection
missnerdypants published on March 9, 2017    missnerdypants translated    reviewed
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