Jiji Press TOKYO (Jiji Press) — Toshiba Corp., set to sell its lucrative flash memory unit, is pinning its hopes on internet of things operations, an area already crowded with powerful rivals including General Electric Co.
In April-September, the major Japanese manufacturing group logged a record first-half operating profit for the first time in 28 years. But nearly 90 percent of it was earned by the flash memory unit, Toshiba Memory Corp.
Toshiba has chosen to sell the chip unit, facing an urgent need to resolve its negative net worth, caused mainly by losses from its U.S. nuclear power plant business.
The struggling company initially planned to beef up infrastructure- and energy-related operations as its core business after the planned chip unit sale.
But Toshiba now believes that these operations will not be enough as its growth engine, although they are expected to generate stable profits.
Toshiba aims to explore opportunities for profits by utilizing IoT technology to develop services to assist cost-cutting efforts by companies.
Toshiba aims to increase IoT business revenue to ¥300 billion in fiscal 2019 from ¥200 billion in fiscal 2016. The number of IoT development personnel will be expanded to 1,500 from the current 1,000.
However, it is uncertain whether Toshiba’s bet will pay off, given fierce competition in the IoT market, whose players also include Hitachi Ltd.