Toshiba has confirmed that it is to split off its operation manufacturing memory chips for smartphones and computers, and will sell a stake in the new business.
The Japanese giant is desperately in need of funds after its US nuclear power business ran up losses which could amount to $6b (£4.78b).
Toshiba's chip making business is the second biggest in the world after Samsung's, and has been valued at between $9bn and $13bn (£7-10b). It accounts for most of the conglomerate’s operating profit. It’s expected that Toshiba will sell off as just under20% of the chip business, valued at around $1.7b (£1.36b), with Canon, Western Digital and Foxconn among the interested parties. But Toshiba’s chief executive, Satoshi Tsunakawa, said he didn’t intend to choose rival chip manufacturers as partners.
Toshiba says it hopes to have struck a deal by the end of its financial year in March, but analysts are calling the move a ‘band-aid’ rather than a solution to its long-term problems.
Toshiba shares have fallen more than 45% since late December, when it revealed the problems in its nuclear arm, linked to a deal done by US subsidiary, Westinghouse Electric. It’s also still recovering from an accounting scandal in 2015 which led to the resignation of its CEO.