Toshiba to Invest $6.4B in Semiconductor Business

Toshiba Corporation has announced plans to invest approximately ¥100 billion (equivalent to $6.4 billion) over the next three years to enhance its semiconductor business. This strategic initiative is part of the Japanese industrial giant’s efforts to drive new growth following its recent privatization.

According to Koji Ikeya, Toshiba’s Senior Executive Vice President, “We expect the company’s total investment over the next three years to be similar to the past three years, but we will focus our investments on growth-oriented sectors.” Ikeya also serves as Vice Chairman of Japan Industrial Partners (JIP), the private equity firm that led the consortium acquiring Toshiba in December.

Toshiba anticipates its group capital expenditure will reach around ¥400 billion by March 2027. As outlined in its medium-term plan announced in May, the company also plans to reduce its workforce by 4,000 employees by November.

“Our objective is not only restructuring but also achieving growth through strategic investments,” emphasized Ikeya.

A significant portion of Toshiba’s increased investment will be directed towards power semiconductors used in electric vehicles and grid equipment. The company intends to establish a new production line at a manufacturing subsidiary in Ishikawa, central Japan, and expand semiconductor facilities in Hyogo, near Osaka, and Prachinburi, Thailand.

Additionally, Toshiba aims to strengthen its core power infrastructure business. “Previously seen as a mature field, it has now become a growth driver,” Ikeya noted. This new growth is driven by the increasing demand for high-energy-consuming data centers, which support the development of generative artificial intelligence (AI).

Toshiba’s goal is to double the operating profit from its energy and infrastructure business by March 2027, compared to the ¥160 billion expected by March 2024.

After years of management turbulence, Toshiba went private last year, ending its 70-year history as a public company to facilitate organizational transformation. The company aims to increase operating profit to ¥380 billion by March 2027, nearly ten times the forecasted profit for March 2024.

JIP will eventually explore exit strategies, including a potential initial public offering (IPO). “I hope that Toshiba’s technological capabilities will shine in the medium to long term, even without JIP as a shareholder,” Ikeya stated.