Toshiba buys SSD business, turns the LITE-ON

Toshiba Memory Holdings Corp. is buying LITE-ON’s SSD business for $165m.

Nobuo Hayasaka, acting CEO of Toshiba Memory Holding Corp., released a prepared quote: “LITE-ON’s Solid State Drive business is a natural and strategic fit with Toshiba Memory and expands our focus in the SSD industry. This is an exciting acquisition for us, as it positions us to meet the projected growth in demand for SSDs in PCs and data centres being driven by the increased use of cloud services.”

LITE-ON is a Taiwan-based business supplying optoelectronics, storage, semiconductors and other devices. The company set up its LITE-ON Storage SBG SSD business in 2008 and designs, develops and makes SSDs in-house. The company uses Toshiba 96-layer flash in its EP4 PCIe SSD.

In May this year LITE-ON ranked third worldwide for PCIe SSD revenues as of the first quarter of 2019, as reported by Forward Insights.

Toshiba will own the LITE-ON SSD brands, operations, assets including equipment, workers, intellectual property, technology, client and supplier relationships and inventories, and gets access to its channels. These include LITE-ON’s relationships with PC suppliers such as Dell.

China syndrome

In January 2018 Anandtech reported that LITE-ON had signed a joint-venture deal with Tsinghua Unigroup to develop and build SSDs in Suzhou, China. The JV plant was planned for completion by the end of 2018. It seems reasonable to infer that Toshiba will get ownership of LITE-ON’s 45 per cent interest in this JV.

The JV, which was to start producing chips in the last quarter of 2018, would provide a separate source of NAND wafers for Toshiba, independent from its JV with Western Digital. Toshiba would also be able to bring modern 64-, 96- and 128-layer 3D NAND technology and fabrication expertise to the venture with Tsinghua Unigroup.

The deal would also bring access to the domestic Chinese market to Toshiba.

IPO and closure

Toshiba Memory Holdings’ IPO is now expected to take place in the first half of 2020. Timing has been delayed by Toshiba experiencing low NAND chip demand due to the US-China trade dispute.

The possibility of LITE-ON selling its SSD business to Toshiba was reported by Digitimes earlier this month.

The transaction is expected to close by the first half of 2020 and is subject to customary closing adjustments and regulatory approval.

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