Toshiba to expand power management chip production with $175 million investment

Toshiba Corp. will spend ¥125 billion, or about $175 million, to expand production lines it uses to make power management chips.

Reuters reported the plan for friday. Toshiba CEO Taro Shimada detailed the investment during an event marking the company recent acquisition from Japan Industrial Partners, a private equity firm. The deal, which valued the manufacturing giant at about $15 billion, ended a more than 70-year run on public markets.

Toshiba’s planned $175 million investment will more than double its production capacity for power management chips. According to Reuters, the company believes such chains represent an “immediate profit driver.” Toshiba hopes to run its power management chip with an operating income margin of at least 10%.

Power management chips can be found in servers, phones, cars, and virtually every other modern electronic device. They help coordinate the flow of energy in the system in which they are installed. This often involves not one but several different tasks.

Some chips in the category, such as so-called eFuses made by Toshiba, are used to protect device components from sudden power surges. The eFuse includes transistors that block the flow of electricity to a subsystem if the voltage is too high. Toshiba says the technology facilitates faster repairs than traditional fuses.

The company’s power management chips also lend themselves to other use cases. They can perform what’s called DC-to-DC conversion, which is the process of switching the electricity flowing from the device’s battery into a voltage that other components of the device can more easily handle. Toshiba’s chips also help mitigate voltage fluctuations that can cause the system to run less efficiently.

Before that, the company invested $1.13 billion in its power management chip business in early 2022. As part of this initiative, Toshiba announced plans for a new factory dedicated entirely to the production of such chips. The facility will manufacture power management products based on 300mm silicon wafers that facilitate higher manufacturing efficiency than the 200mm wafers used by Toshiba in the past.

The $14 billion deal through Japan Industrial Partners, which bought the company last week, bought it not only a significant semiconductor business but also a range of other assets. Toshiba offers a wide variety of products including laptops, smart home appliances and elevators.

Japan Industrial Partners also acquired the company’s 40.6 percent stake in Kioxia Holdings Corp., one of the world’s largest flash chip makers. Kioxia originally operated as a subsidiary of Toshiba, which invented the flash in 1980, before spinning off a few years ago. Today, it operates a network of chip factories in collaboration with Western Digital Technologies Inc., which is also the company’s main research and development partner.

Photo: Toshiba

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