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Toshiba Is 'Burning Cash At An Alarming Rate' (reuters.com) 103

Posted by BeauHD from the money-tree dept.
bsharma quotes a report from Reuters: Faced with the prospect of a multibillion-dollar write-down that could wipe out its shareholders' equity, Japan's Toshiba is running out of fixes: It is burning cash, cannot issue shares, and has few easy assets left to sell. The Tokyo-based conglomerate, which is still recovering from a $1.3 billion accounting scandal in 2015, dismayed investors and lenders again this week by announcing that cost overruns at a U.S. nuclear business bought only last year meant it could now face a crippling charge against profit. Toshiba says it will be weeks before it can give a final number, but a write-down of the scale expected -- as much as 500 billion yen ($4.3 billion), according to one source close to Toshiba -- would leave the group scrambling to plug the financial hole and keep up hefty investments in the competitive memory chip industry, which generates the bulk of its operating profit. "Toshiba's immediate problem is that it is burning cash at an alarming rate, and this will be more than challenging," said Ken Courtis, chairman of Starfort Investment Holdings. "I see little option but to sell a slew of non-core assets."One source in the semiconductor industry said Toshiba could revive plans to list a slice of the memory chip business, which though highly profitable burns through cash for reinvestment. "Toshiba will probably need to sell 30-40 percent of the NAND business in an IPO to secure enough cash," the source said, adding China's aggressive drive into NAND flash memory chips could make the timing reasonable. The group has already said it could reconsider the "positioning" of its nuclear business, deemed core last year, and has signaled it could trim an 87 percent stake.
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Toshiba Is 'Burning Cash At An Alarming Rate' More

Toshiba Is 'Burning Cash At An Alarming Rate'

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  • Gotta love them. A momentary dip in profitability can kill a company dead as they circle like jackals. Anyone else remember when 3DFX products were flying of the shelf and they still went out of business?

    • Re: (Score:2)

      by Guspaz ( 556486 )

      Their products weren't flying off the shelves, and they had crippled the development on their NV20 competitor to get the V4/5 out the door. Even if the creditors hadn't killed the company prematurely, their past mistakes meant that they probably would have put out a card competitive with the GeForce 3 right as the GeForce 4 was coming out.

    • Re: Good old short term investers (Score:4, Interesting)

      by orlanz ( 882574 ) on Thursday December 29, 2016 @10:59PM (#53576603)

      What do short termers have to do with this? First, the company really screwed up last year. I doubt they have many willing long term investors left. Scandals like that hit long time supporters the most.

      But that scandal is what is messing with them now. It's a pretty bad confidence hit to their accounting practices to mess up like that. This just makes it far worse. That lack of accounting & transparency confidence severely limits your investor pool. It rules out those big ticket govt backed entities like 401k funds.

      And because of the screw up, they're barred from issuing more stock. Even though it's 4+ billion, for a company this size, that is easily solved by stock. But they don't have that option now. BTW, short term investors are the ones which would have bought up that stock issuance.

    • It's comments like this that indicate how poorly informed the general public is on financial matters. 3DFX went under because they were burning through money hand over fist and ended up owing more money than they could ever make.

      3DFX made a very poor decisions to purchase Diamond Graphics factory in Mexico and began sole sourcing their boards. This was a colossal mistake at the time as the cheap Chinese assembly factories were just coming online and all the OEM's out of China were willing to lose money to g

      • You sure about that? If I remember correctly, DiamondMM was bought by S3, and 3dfx bought the STB factory.

  • Do we have an idea why they invested into nuclear? The technology is aging, and everyone bets on renewable now.

    • Re:Why nuclear? (Score:4, Informative)

      by ColdWetDog ( 752185 ) on Thursday December 29, 2016 @10:10PM (#53576285) Homepage

      The Westinghouse AP-1000 [wikipedia.org]. A 'new', safe(r) plant that was supposed to be the savior of the nuclear power industry. Unfortunately, it's still to complicated and expensive for anybody to put together on any sort of economical basis. Toshiba holds a majority stake in Westinghouse.

      • Re: (Score:1)

        by Anonymous Coward

        "Complicated" as in the design is simpler and uses substantially less resources. From the AP1000 [wikipedia.org] entry:

        A design objective was to be less expensive to build than other Generation III designs, by both using existing technology, and needing less equipment than competing designs that have three or four cooling loops. The design decreases the number of components, including pipes, wires, and valves. Standardization and type-licensing should also help reduce the time and cost of construction. Because of its simplified design compared to a Westinghouse generation II PWR, the AP1000 has:

        50% fewer safety-related valves
        35% fewer pumps
        80% less safety-related piping
        85% less control cable
        45% less seismic building volume

        The AP1000 design is considerably more compact in land usage than most existing PWRs, and uses under a fifth of the concrete and rebar reinforcing of older designs.

        Cost of nuclear is out of control in places like the US, but it is a problem with red tape, not technology.

        • Not really. [wikipedia.org] Was a pretty cool guy, lived in the neighbouring town.

        • Re: (Score:3)

          by Rei ( 128717 )

          Cost of nuclear is out of control everywhere. Ever checked out, say, the Olkiluoto Nuclear Plant [wikipedia.org]? In what way is the many-billion-euro overrun / decade-late reactor due to "red tape"? The answer is "virtually nothing". And it's the same story everywhere.

          Beyond that, the last thing you want when dealing with nuclear is underregulation. Nuclear disasters aren't particularly deadly, but they're massively expensive. They're disasters in slow motion, like an advancing lava flow - you can run from it, but y

          • Of course. If you stop building something for 2-3 decades and only then you restart production, a lot of institutional knowledge is lost, production lines need to be restarted, and it will take longer than it used to. As for Olkiluoto its a basket case. The EPR was considered too complicated a design by many when it came out and to a large degree many of the issues are also due to different standards.

            Fukushima was irrelevant vs the rest of the costs of the tsunami. I wouldn't be surprised if the decision to

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      Nuclear was making a big comeback till Fukushima happened.

      Renewable isn't all that great, though. It can't draw enough power. I bet nuclear makes another comeback, but probably not soon enough for Toshiba.

      • Well, great or not, renewable is the current trend [slashdot.org]

      • Renewable isn't all that great, though. It can't draw enough power.

        What does that even mean?

        I bet nuclear makes another comeback, but probably not soon enough for Toshiba.

        Keep your fingers crossed for the stellarator. Fission ain't making a comeback.

        • Re: (Score:2)

          by sjames ( 1099 )

          It's a shame too. One more generation of fission (the right design) could burn up much of our 'waste' and leave us all better off. For once, our energy production could reduce our pollution problem.

          • It's a shame too. One more generation of fission (the right design) could burn up much of our 'waste' and leave us all better off. For once, our energy production could reduce our pollution problem.

            I have stated repeatedly (here and elsewhere) that the only kind of fission plant I would support would be a breeder that helped solve our waste problem. And if anyone were actually trying to build such a reactor, that would be great. There are a couple of problems with it, like transporting the waste to the reactor, or building the reactor small enough so that you can simply build it on an old fission site and burn up the waste lying around there in a pool of water, decommission it when you're done and sti

        • Keep your fingers crossed for the stellarator. Fission ain't making a comeback.

          Bwahaha. Stellarators... Might as well hope for pink unicorn dust. Last I heard none of the actual nuclear fission reactors under construction around the world have been cancelled, even with all the hot air around Fukushima, China alone should have several more reactors come online next year.

    • Basically doubling down hoping to make it work at scale as a market leader. But, they paid too much for that title, and the growth of nuclear is not looking as likely. I forget if they are invested in the SMR market, but that will require even more capital.

    • > everyone bets on renewable now

      A shitload of competition is not a good thing for a company. Much smarter, most of the time, is to set yourself so that no matter who wins the race for whatever is hot, you win your own parallel race. Think of Levi Strauss selling rugged pants during the gold rush, and people getting rich selling shovels and picks, or brokering gold, buying it from the miners and selling it. They win no matter which miner strikes gold.

      Solar electricity is really great, except at night

      • Re:Nuclear complements wind & solar very well (Score:4, Interesting)

        by ColdWetDog ( 752185 ) on Thursday December 29, 2016 @11:10PM (#53576661) Homepage

        Or, you could just upgrade the transmission infrastructure like you need to anyway. That way when it's sunny in Las Vegas and cloudy in Seattle you can move those electrons around.

        It's also likely that storage technologies will improve enough to where nuclear really isn't needed. It's a useful technology and if we had handled it correctly, would probably account for baseload for a number of generations. But we screwed it up (we being pretty much the entire human race) and it is anything but clear that it will be viable in the next 20-40 years.

        • You can transmit power from LA to San Francisco, and that does help. Keep in mind the idea, for many people at least, is to switch to clean *energy*. Meaning getting rid of gasoline, diesel, heating oil, the tons of coal used in industrial furnaces, etc. You don't need to generate the same electricity as all of today's power plants, you need at least four to eight times as much electricity, if you want to get rid of diesel etc. It's an enormous amount of power.

          Our eyes sense brightness according to a power

          • Re: (Score:2)

            by haruchai ( 17472 )

            When the western half of the US is covered in clouds (and much of it was covered just last week), there's no way you're going to have enough solar power

            A mix of generation will likely always be needed; even France doesn't run on 100% nuclear and a certain amount of overbuilding will be needed but the penetration of renewables at this time is low enough that's not a concern - yet.
            But for a place like Denmark, wind power alone can sometimes supply more electricity than the country's *entire* demand and most be exported or curtailed.

            • Peak 15% of Denmark's energy from wind, 48% coal (Score:4, Informative)

              by raymorris ( 2726007 ) on Friday December 30, 2016 @03:06AM (#53577341) Journal

              > But for a place like Denmark, wind power alone can sometimes supply more electricity than the country's *entire* demand

              Denmark imports trash to burn in order to heat houses. At it's peak, on a day with perfect winds, their renewables can provide the ELECTRICITY for a few hours, while they are burning coal and trash for heat, diesel and gasoline for transportation. Normally, wind provides about 5% of their energy, due to a nasty problem called the cube law (more on that later).

              Even if you ignore the trash burning heating plants and focus only on electricy, coal power provides 48.0% of Denmark's *electricity*.

              Wind is really awesome in some ways, seriously. It's great when the wind is great, but the cube law is a motherfucker. The power of wind is proportional the velocity CUBED. Suppose a windmill is designed to work in winds up to 40 MPH wind. 40^3 is 64,000, so the structure is absorbing 64,000 units of power without damage. When the wind is 10 MPH, the power is 1,000; 99% less. In a structure designed for 64,000 power, 1% of the energy will be lost in big beefy bearings, etc. At 10 MPH, 1% is most of the power available - a 10 MPH wind barely overcomes friction and there's no substantial power generated. The cube law is a bitch, but it's fundamental physics.

              That's not to say wind power shouldn't be used! It's great when the wind is right and you can throttle down the natural gas power plants.

              • Denmark gets 40% of the electricy from wind. Note that a lot of the Danish coal powered electricy gets exported to Sweden who claims to run 100% on renewable and nuclear, but have to import coal-power during peak hours and during entire seasons if the hydro dams are not fully "charged" with water.

              • Re: (Score:2)

                by Rei ( 128717 )

                You're confused; you seem to think that wind turbines are designed to bear and generate from the maximum force winds that they experience. They don't. At high wind speeds they're feathered and/or braked. The nameplate capacity is met at about 25mph for a typical turbine. At very high speeds (for example, over 55mph) they outright shut off and don't generate anything, but between that range they generate at their nameplate capacity. At under the base speed (for example, below 25mph) they produce less -

                • > You're confused; you seem to think that wind turbines are designed to bear and generate from the maximum force winds that they experience. They don't. At high wind speeds they're feathered and/or braked. ... At very high speeds (for example, over 55mph) they outright shut off and don't generate anything,

                  I'm well aware that they also don't work at high wind speeds, that's yet another problem with wind turbines that I didn't want get into; my post was already long enough.

                  Completely off-topic, I notice

                  • Re: (Score:2)

                    by Rei ( 128717 )

                    Thanks :)

                    My point however was that you give the wrong impression. You painted a picture of a steady cubic curve, when in reality it's a cubic curve only at low to moderate speeds, followed by a long plateau at moderate to high speeds, followed by a sudden dropoff to zero. You made it sound like turbines would yield a tiny capacity factor, when in reality they average over 30% of nameplate. I wanted to make sure people had the right impression. :)

                • Re: (Score:2)

                  by haruchai ( 17472 )

                  Average capacity factor for wind in the US is over 30% every year [eia.gov]

                  A substantial amount of progress in improving wind turbine capacity factors has been made in recent years.

                  Wikipedia charts on wind turbines shows 2.5GW nameplate in 2000 with 5.6 GWhs generated or a capacity factor of 25.6%
                  In 2010, there was a total of 40GW generating 94,650 GWh, a capacity factor of 27%, so not much average improvement
                  But if you remove all those turbines & their generation from succeeding years, what do you get?
                  For 2013, that would be 20 GW generating 71,500 GWh or 41% capacity factor
                  F

          • Comment removed based on user account deletion

            • > Why not use molten salt for power storage?

              It IS used. Solana, a major solar plant, uses molten salt. It provides up to six hours of storage (though some energy is lost during that time) and helps the plant to generate about 38 percent of its rated capacity each year. As I said, the storage we have today (and will likely have in the next 50 years) is great for using afternoon power to cook dinner in the evening, a few hours later. That's really important. It could double the amount of solar we can

          • Re: (Score:2)

            by Rei ( 128717 )

            Tell it to Nature [nature.com] that it doesn't work. In the above paper (you can download it on SciHub if you don't have access) they model the creation of an optimal HVDC grid and cross-country solar, wind, and NG peaking plants (as well as one scenario with coal) and end up with reliable, low carbon power at lower costs than current grid rates - with no use of storage and no assumption of improved technologies.

            Wind and solar tend to run counter to each other. Wind is strongest at night; solar only generates during t

          • Our eyes sense brightness according to a power law. What looks "about half as bright" to our eyes is actually about 15% as bright, in terms of luminous power. A sunny day is about 120,000lux, a cloudy day about 1,000lux. Meaning when it's cloudy, the sun's power is reduced by over 99%

            So whether or not you meant to do so, this does illustrate what a catastrophically bad unit of measure the candela is. A fundamental unit that is weighted by a model of human vision is, well, not terribly fundamental, wouldn't you say? But I am sure you're not meaning to say that solar panels have the exact absorption characteristics as human eyes do. Maybe you would like to rethink your conclusions there slightly.

            • You quoted it, did you not read it? "Our eyes sense brightness according to a power law. What looks 'about half as bright' to our eyes ... the sun's power is reduced by over 99%".

              The point is that although it appears, to your eye, to maybe half as much energy, or maybe 70% less, it's actually 99% less. So yes, lux, the intensity of light visible to the eye (not ultraviolet or infrared) is the right unit of measure.

              > I am sure you're not meaning to say that solar panels have the exact absorption characte

              • No, you're confusing youself. The lux measurement is the perceptual one, you know, the one that ignores wavelengths that humans can't see, and weights the wavelengths that we can see with peaks at the idealized human visual response. The actual radiant intensity at any given moment is going to be much greater. Measuring light levels in lux is completely useless unless you're a lighting director. It is a statement about human eyeballs, and should not be used when talking about things that are not human eyeba

    • Do we have an idea why they invested into nuclear? The technology is aging, and everyone bets on renewable now.

      Very few people cared about renewables back when Toshiba started investing in nuclear. By the time people cared and by the time renewable became reasonably cheap Toshiba (Westinghouse) was basically the worlds biggest nuclear services company. Hence the continued investment by gobbling up a competitor recently.

  • Nuclear has had 50 years to become profitable. It is not and will not be profitable except in countries who subsidize it as the only practcle option. There is. O nuclear renaissance because in most cases the risks do not outweigh the benefits. Same thing is true for coal now that natural gas is almost free.

    • Re:Don't believe the hype (Score:4, Insightful)

      by Altrag ( 195300 ) on Friday December 30, 2016 @02:34AM (#53577265)

      Trouble is, nuclear effectively has to pay up front, in terms of higher regulatory and safety requirements, for potential damage that may or may not ever come to be (meltdown) while other forms of energy -- especially coal -- have historically had little or no limitations applied even though they're spewing environmentally and biologically damaging particulates for many, many decades (and that's just the burning -- the mines aren't exactly helping to clean up the planet either.)

      Its changing for coal of course nowadays, but they've certainly had a good run of it and other forms of power are still not having to pay for any impacts they may eventually have on the planet.

      We're only just beginning to recognize the impacts of wind power (primarily in the form of noise pollution,) and solar panels might be clean energy once manufactured but the manufacturing process has a non-zero impact and so forth. How much of that gets included in the price of a panel and how much is just left as an externality for whoever (or whatever) happens to live near the manufacturing plants?

      I'm assuming that even in aggregate, solar and wind are still far cleaner than coal but that doesn't mean that there aren't still hidden costs somewhere along the chain that nobody's paying for (yet) that are acting as an effective but unquantifiable subsidy that nuclear just doesn't get to enjoy. Overall, that just makes it significantly more challenging for nuclear to compete.

  • Cost overruns at a nuclear reactor business! How blind do you have to be to not see that one coming? That's an industry in which the cost overruns get overruns. The only possible thing that could shock me when it comes to building a reactor is if it's done on time and on budget.

  • I wonder if Apple is still looking for companies they can pick up and diversify nicely, even in the US market?

  • My first radio was a Toshiba (Score:2, Interesting)

    by Anonymous Coward

    Having "6 transistors" was a selling point back then, apparently, because I remember it well. It was a pocket radio, white and brown, with a big dial for the AM band and small one for the volume. Had an ear phone, which I used to talkbox way before Frampton. He must have seen me. It would be a sad day in Mudville if it went the way of the doodoo.

    • Having "6 transistors" was a selling point back then, apparently, because I remember it well.

      The first transistor radio had only four transistors [wikipedia.org] and the second had eight. The world then suddenly became flooded with transistor radios, after transistors became basically affordable but before they became cheap. That meant that there was enormous pressure to reduce transistor count, but those transistors actually did stuff, and taking them out made the radio do less stuff. Like, say, less amplification...

      It would be a sad day in Mudville if it went the way of the doodoo.

      Doodoo? That's really putting the mud in Mudville.

  • Toshiba has always invested a lot in research, and their products were really good. Too bad that happens to them.
  • Hm does that mean that the "no matter what guarantee" by Toshiba won't cover this
  • Or someone on the director's board was conned into buying a turd.
    Nuclear power plant designs are a course into maximizing complexity with more active security systems.
    Water cooled reactors with solid fuel bars are a bad design, even its inventor thought it was a bad idea in the long term.
    The fuels rods don't burn all fissile material, they get less dense as gaz byproducts accumulate and leave out a lot "waste" materials that could be turn into energy.
    The water cooling has to be kept at all times, failur
  • overboard. Sell what you can sell. And burn what ever is burning cash that you can't sell.
  • I've been in the photocopier business for over 35 years. In the last 25, I've mainly been associated with Toshiba, Konica/Minolta, Samsung. In the past 10 years, the Toshiba machines have become CHEAPER. Less metal, more plastic. On a machine with a lot of moving parts, when you take away strength in the frame, things start to shift around. Plastic just doesn't hold together well. Yeah, a lot of the machines have less metal, but, when you pick up a Toshiba, then pick up a Konica/Minolta or Samsung, of s

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