Japan mulls semi-nationalising Tosh (memory biz) – report
State aid considered to keep tech smarts and jobs in Japan
The Japanese government is considering providing state-backed aid to Toshiba’s memory business, amounting to near partial nationalisation, to prevent it falling into Chinese or South Korean hands, according to a report.
The article in Nikkei Asian Review goes on to say that the Development Bank of Japan is considering a Toshiba Memory investment fund. It says the bank is in talks to enlist Japan's public-private Innovation Network Corporation of Japan (INCJ) as a co-investor.
The storage firm's memory business is being spun off and a stake, possibly a majority stake, sold off to re-capitalise Toshiba after terrible multi-billion dollar cost over-runs in its US nuclear power plant business.
Potential interest in buying into the memory business has come from China (Foxconn, Tsinghua Unigroup), South Korea (SK Hynix), Taiwan, and the USA (Micron, Western Digital, Bain).
Previously Japanese government use of foreign exchange and foreign trade laws could be used to block bids from entities thought disadvantageous to Japanese national security interests.
As reported in the Nikkei Asian Review report, Satoshi Tsunakawa, President of Toshiba, is quoted as saying that NAND memory chip technology “relates to such matters as national security, so we will keep that in mind as we choose a partner.”
We might suppose China, South Korea and Taiwan might represent national security concerns for Japan, with China top of that list.
An anonymous senior official in Japan’s Ministry of Economy, Trade and Industry is quoted as saying “a sale to the Chinese or Taiwanese would be especially tough,” from the viewpoint of loss of technology deemed vital to Japan.
It has been suggested that the Japanese industry ministry, which oversees the INCJ, could direct it to invest in the business as a form of state aid. Toshiba’s business partners may also be invited or requested to invest.
The Nikkei report says that if such a fund held 34 per cent of the voting rights in the spun-off Toshiba memory business then it would have veto power to prevent technology knowledge, capability and jobs leaving the country.
Separately, Toshiba is considering selling its disastrous US nuclear power plant operation. ®