Toshiba's in chaos, but not quitting PCs -- yet

Toshiba is selling part of its memory chip business to cover the billions it lost building nuclear power plants

Toshiba is more than a laptop maker, but the vast Japanese conglomerate shrunk on Tuesday under a wave of bad news.

In one day, the company lost its chairman, said it will stop building nuclear power plants, wrote off about US$6.2 billion relating to that business, and postponed its fourth-quarter earnings report for a month.

Its financial problems were no secret: Two weeks ago, it revealed plans to sell stakes in its memory chip and SSD businesses to cover the nuclear write-offs.

Last June, it sold an 80 percent stake in its domestic appliances business, Toshiba Lifestyle, for $450 million. Before that sale, it had been planning to develop a series of smart appliances that could link up with its TVs and PCs.

On Tuesday, instead of the final results expected, the company published provisional figures showing negative shareholder equity, and Japanese media reported analyst speculation that the results were delayed because auditors refused to sign off on the accounts.

The nuclear write-down, then, could topple Toshiba — but even if it doesn’t, the company could still be forced to sell further assets, perhaps including its PC and laptop business.

It's certainly a well-trodden path for Japan's PC makers, and one that Toshiba reportedly has considered before.

Sharp pulled out of the business in 2010 to concentrate on tablets, and Sony sold its Vaio PC business to an investment firm in 2014. That unit now operates as a standalone company under the Vaio name.

NEC put its PC business into a joint venture with Lenovo, then sold that company the majority of its stake in July 2016. And last October, Fujitsu said it was discussing a "strategic cooperation" with Lenovo on PC manufacturing.

As for Toshiba, in December 2015 The Wall Street Journal reported that the company wanted to spin off its PC business and had approached other manufacturers, including Vaio and Fujitsu. Those talks apparently came to nothing, and in March 2016, Toshiba announced it would stop making consumer laptops to focus on the enterprise.

Even if Toshiba sells off its remaining enterprise PC business, it still has fingers in a lot of pies. It makes tablets, TVs, Blu-ray disc players, hard disks and image sensors -- and that's just the IT-related activities.

It is also involved in power generation, railroads, industrial control systems and something it calls the hydrogen economy, a long-term bid to make hydrogen fuel cells an easy and economic source of electrical energy for isolated homes and island communities.

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Peter Sayer

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