Toshiba Memory has this week announced the acquisition of the SSD business of Lite-On Technology Corp, allowing Toshiba to produce its own SSDs using proven IP, technologies, and product lines. Under the terms of the agreement, Toshiba Memory will pay Lite-On $165 million dollars for its SSD business, which includes IP, R&D operations, manufacturing lines (i.e., equipment, buildings, etc.), sales channels, and other assets.
Strategic Benefits of the Acquisition
This acquisition is a strategic move for Toshiba Memory, which will soon be rebranding as Kioxia Holdings this October. By acquiring Lite-On’s SSD business, Toshiba Memory will significantly expand its SSD market share. This expansion is crucial as it allows the company to improve its profit margins. Selling complete SSD drives is more lucrative compared to selling just 3D NAND memory chips. The transaction is expected to close sometime in the first half of 2020, marking a significant milestone for the company.
Nobuo Hayasaka, acting President and CEO of Toshiba Memory, explained: “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 centers being driven by the increased use of cloud services.”
Market Implications and Future Prospects
The acquisition of Lite-On’s SSD business is expected to have far-reaching implications for the SSD market. With the increasing demand for faster and more reliable storage solutions, particularly in PCs and data centers, Toshiba Memory is positioning itself to be a key player in this growing market. The integration of Lite-On’s proven technologies and product lines will enable Toshiba Memory to offer a broader range of SSD products, catering to various market segments from consumer electronics to enterprise solutions.
Moreover, the acquisition will likely spur innovation within Toshiba Memory’s R&D operations. With access to Lite-On’s intellectual property and research capabilities, Toshiba Memory can accelerate the development of next-generation SSD technologies. This could include advancements in storage capacity, speed, and energy efficiency, which are critical factors for modern computing needs.
The rebranding to Kioxia Holdings also signifies a new chapter for the company. The name “Kioxia” is derived from the Japanese word “kioku” meaning “memory” and the Greek word “axia” meaning “value.” This new identity reflects the company’s commitment to creating value through memory solutions. As Kioxia Holdings, the company aims to strengthen its global presence and continue its legacy of innovation in the memory industry.
The acquisition of Lite-On’s SSD business by Toshiba Memory is a strategic move that positions the company for future growth and success. By expanding its SSD market share and leveraging Lite-On’s technologies, Toshiba Memory is well-equipped to meet the increasing demand for high-performance storage solutions. The rebranding to Kioxia Holdings further underscores the company’s commitment to innovation and value creation in the memory industry.
Source: AnandTech
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