TOKYO — Ill-fated investments in nuclear power projects by Toshiba of Japan have already precipitated an embarrassing accounting scandal at the company. Now the company is selling its most valuable business to try to undo the damage.
Toshiba, one of Japan’s oldest and proudest technology conglomerates, said on Friday it would spin off its microchip division. The business makes the information-storing “brains” inside millions of smartphones, digital cameras and other devices, and it has been the biggest contributor to Toshiba’s profits in recent years.
The move is evidence of Toshiba’s desperation for cash after the punishing nuclear-related losses came to light last month.
In December, Toshiba warned it was preparing to write off “several billion U. S. dollars” because of ballooning expenses at its American nuclear subsidiary, Westinghouse. That followed Toshiba’s admission in 2015 that it had inflated its earnings by $1.2 billion over seven years — a scandal that company investigators attributed in part to nuclear-project managers, who they said had disguised faltering revenues and cost overruns.
Toshiba is expected to detail the extent of its write-downs next month. Analysts have suggested they could amount to $4 billion to $7 billion, enough to put Toshiba’s future at risk. Banks have indicated they will keep lending money so the company can pay its bills, but without that lifeline, Toshiba, a 140-year-old business, could collapse.
Toshiba said it had not yet decided what form the semiconductor spinoff would take, or how much of the business it would sell to outsiders.
