April 13, 2024
Investment

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


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

Reuters reported the plan on Friday. Toshiba Chief Executive Officer Taro Shimada detailed the investment during an event marking the company’s recent acquisition by Japan Industrial Partners, a private equity firm. The deal, which valued the manufacturing giant at about $15 billion, concluded a more than 70-year run on public markets.

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

Power management chips can be found in servers, handsets, cars and practically every other modern electronic device. They help coordinate the flow of power within the system in which they’re installed. That often involves not one but several different tasks.

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

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

Previously, the company invested $1.13 billion into its power management chip business in early 2022. As part of that initiative, Toshiba announced plans for a new fab dedicated entirely to making such chips. The facility will make power management products based on 300-millimeter silicon wafers, which facilitate higher manufacturing efficiency than the 200-millimeter wafers Toshiba has used in the past.

The $14 billion deal through Japan Industrial Partners purchased the company last week bought it not only a sizable 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 gained the company’s 40.6% stake in Kioxia Holdings Corp., one of the world’s largest flash chip makers. Kioxia originally operated as a subsidiary of Toshiba, which invented flash in 1980, before spinning off a few years ago. Today, it runs a network of chip fabs in collaboration with Western Digital Technologies Inc., which is also the company’s main research and development partner. 

Photo: Toshiba

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