Japan’s Toshiba Corp said on Wednesday it will sell its image sensor business to Sony Corp and overhaul its unprofitable semiconductor businesses as it works to recover from a $1.3 billion (roughly Rs. 8,455 crores) accounting scandal.
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However, when it comes to the smartphone business, Sony has an ace up its sleeve: sensors. The newly purchased Toshiba operations will be intergraded into that company. Sony’s sensors are recognized as first class and are used in the widely lauded Nexus 6P, which is manufactured by Huawei.
Masashi Muromachi, who became Toshiba’s CEO following the accounting scandal, has promised to restructure lower-margin businesses. The move would allow the Xperia maker to boost its production capacity and meet the demands for its camera sensors.
Even if its smartphones never manage to turn a profit, by taking over Toshiba’s imaging business and spinning its own sensor sector into a separate company, Sony has secured its place in the smartphone industry for years to come. And after its senior executives were found to have played a big part in inflating the company’s profits, Toshiba had revised down its pre-tax profit figures and its net profit figures over a seven-year period. The misstating of accounts appears to have been born of managerial pressure placed on operating companies and affects the PC, visual products and semiconductor business units.
With this acquisition, Sony’s image sensor business just got a whole lot more serious.
While Sony has gained huge praises and traction in the field of photography, the Japanese conglomerate is not doing so hot in the financial market at the moment.
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Toshiba and Sony aim to complete the transfer within the fiscal year ending March 31, 2016, subject to any required regulatory approvals.
