Would a delisting from the Tokyo Stock Exchange really be the end of the world?
Thursday's self-imposed deadline for Toshiba Corp. to sell its semiconductor business came and went with no deal. Toshiba's inability to finalize an agreement with the consortium led by Western Digital or any of the other bidders still in the hunt has heightened fears that Toshiba won't be able to sell the unit in time to avoid being delisted.
Despite Toshiba's obvious trepidation over this possibility, maybe it wouldn't be the worst thing in the world. A delisting would remove the pressure to close a deal, enabling Toshiba to hold out for a better price and better terms.
According to Jim Handy, principal analyst with memory focused research firm Objective Analysis, the longer that Toshiba waits to consummate a sale, the higher the valuation of Toshiba Memory may ultimately be. "I’m not sure [delisting] is all that bad for them," Handy said. "So far, that’s the issue that has been driving the deadlines."
On the other hand, with its future ownership in limbo, Toshiba Memory has no doubt had to delay some decisions about long-term planning and investment. With each passing day that Toshiba Memory remains at least in part a rudderless ship, it could potentially falls that much further behind Samsung and other competitors in the cutthroat NAND flash business.
The memory chip business is not for the faint of heart. Even while enjoying the best year in the NAND business for some time, NAND vendors are busy girding for the battles to come — investing billions of dollars to ramp up capacity and bring more 3D NAND capacity online.
According to DRAMeXchange, a market research firm that tracks memory pricing, Toshiba's second quarter market share in the NAND market slipped to o17.5 percent — down more than 1 point from 18.8 percent in the second quarter of 2016. Nearly all of the market share that Toshiba surrendered went to Samsung, the market leader, which increased its share to 35.6 percent from 34.4 percent last year.
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