Toshiba is a Japanese conglomerate well known for its commercial storage and electronic device solutions. The company is going through a rough patch this year as it’s revenues from April to June were down by 7% from last year. DRAM prices are plummeting across the board with a 30% decline this year.
This is largely due to an oversupply issue as companies anticipated high-demands, which obviously didn’t happen. TheRegister writes “The blame for the decline is said to rest largely on the shoulders of Intel, which right now is bent on churning out high-end processors for servers to the detriment of its lower-end chips. That means PC makers are building fewer desktop machines because they can’t get the Intel CPUs for them, which means fewer DRAM orders, which means stockpiles of desktop-grade RAM chips are building up in the warehouses of the semiconductor suppliers. And that’s driving down prices: the supply of DRAM is outstripping demand.”
DRAM prices have also hit Toshiba’s Storage division quite a lot, to add to their woes an unexpected power outage in the Yokkaichi region in Japan affected production. The power outage also damaged some of the processed wafers, although Toshiba didn’t disclose their exposure to the incident. According to a recent Tweet by Chris Ramseyer, who wrote for TweakTown, Toshiba is going to buy LiteOn’s storage unit. This move might be motivated by the incident above, but I wouldn’t speculate at this point.
Since I left TweakTown I don’t have a place to write news but here is a tip.
Toshiba will buy LiteOn’s storage unit with an announcement coming in a few days.
— Chris Ramseyer (@ChrisRamseyer) August 7, 2019
LiteOn is another consumer electronics company with a storage division. Their last quarter results were really good, although the company maintained a cautious outlook amid the trade war tensions between China and the US. LiteOn’s storage segment amounts to 13% of its total revenue, which is dwarfed by the IT segment (contributing 66%). All the big companies like Samsung, Toshiba, and SK Hynix have enough cash reserves to hold out the DRAM price purge, but it might dent small companies like LiteOn. That is all the information we have right now, but we will update the article with more details after the official announcement.