With declining sales, Taiwan-based Lite-On Technology is selling its solid-state storage business to Toshiba Memory for $165 million.
Following speculation in early August, Lite-On Technology has now confirmed it is selling its solid state drives (SSD) business to Toshiba Memory Holdings Corp. (soon to become Kioxia Corp.) for US$165 million. Lite-On said the sale will allow it to focus on its core businesses including transformation towards cloud computing, LED lightning, automotive electronics and industrial automation.
The transaction, expected to be a purchase of shares in an all-cash deal and completed by April 2020 (subject to relevant approvals), involves the transfer of Lite-On SSD's business operations and assets, including inventories, equipment, personnel, intellectual properties, technologies and client and supplier relationships.
Toshiba Memory sees the acquisition as a way to significantly strengthen its SSD business. Speaking about the deal, Nobuo Hayasaka, acting president and CEO of Toshiba Memory, 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 centers being driven by the increased use of cloud services.”
Lite-On is a Taiwan-based supplier of optoelectronics, storage and various electronic components. The SSD business started as a business unit under Lite-On in 1995. Its PC SSD business began in 2008 and cloud data center SSD development in 2014; it now provides highly customized ready-to-use SSD for both enterprise and client PC applications with a customer base throughout America, Europe and Asia.
In its last quarterly financial report, Lite-On indicated sales for its storage devices was down from $15.4 million for the six-month period ending on 30 June 2018, to just $11.6 million during the same period in 2019. Its total sales for the period were $85.6 million, of which its information technologies (IT) segment – which covers notebooks, desktops, tablets, servers, networking devices and peripherals – recorded the highest proportion, at $56 million; optoelectronics, which covers LEDs, camera modules, and automotive electronics, was also down to $13.6 million in the first six months of 2019 compared to $28.1 million for the same period in 2018.