EMS provider Lite-On Technology has disclosed it originally planned to transfer its SSD business unit to Kioxia Holdings (renamed from Toshiba Memory) on April 1, 2020, but the Japanese memory company has been unable to finish the takeover procedures due to delay in the wake of coronavirus outbreak. Both sides have agreed to postpone the transfer with the date yet to be decided.
The transfer, agreed on by both sides in August 2019, will include all the business unit's personnel, production equipment, technology and proprietary intellectual properties, inventory and client relations at a tentative price of US$165 million. In line with the transfer, Kioxia has added investment of NT$8.2 billion (US$271 million) in its Taiwan subsidiary.
As Kioxia's SSD assembly lines in the Philippines has been temporarily shut down since March 18 due to the outbreak, the delay in transfer of Lite-On's SSD business unit is expected to affect Kioxia's SSD production, industry sources said.
With international PC vendors being main clients, Lite-On's storage product line accounts for about 12% of consolidated revenues and SSDs take up 50-60% of the sales from the product line, the sources noted. Through Lite-On's SSD business unit, Kioxia has entered the supply chain for Microsoft business-use SSDs, the sources indicated.
Article translated by Adam Hwang
