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Toshiba Memory Holding Corp slurps Taiwanese firm LITE-ON's SSD biz

What will $165m buy? Brands, ops, workers, IP, channel stocks and OEM deals

Toshiba Memory Holdings Corporation (TMHC) is buying LITE-ON's SSD business for $165m.

Taiwan-based LITE-ON supplies optoelectronics, storage, semiconductors and other devices.

The company set up the SSD business in 2008 to design, develop and build the kit in-house and as of calendar Q1 ranked third globally for PCIe SSD revenues, according to Forward Insights.

Under the terms of the agreement, Toshiba will own the LITE-ON SSD brands and 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.

Nobuo Hayasaka, acting CEO of TMHC, said: "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."

The buy of LITE-ON, which already uses Toshiba 96-layer flash in its EP4 PCIe SSD, is expected to close by the first half of 2020 and is subject to the customary closing adjustments and regulatory approval.

In January 2018, it was 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.

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

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