Officially delisted! The century-old ship sank

“Toshiba of the new era”, can the new era still come?

Toshiba, known as the "light of Japanese manufacturing", has products covering white goods, power equipment, medical equipment, transportation equipment, nuclear reactors, semiconductors, computers and many other fields.

Many people’s first TV, first computer, and first USB flash drive all came from Toshiba. The popular slogan “Toshiba, Toshiba, Toshiba of the new era” is also many people’s “90s memory” of Toshiba.

On December 20, 2023, this century-old giant officially delisted, ending its 74-year listing history.

While sighing, Toshiba, which has experienced ups and downs, is also a microcosm of the rise and fall of Japanese manufacturing: from its rapid rise after the war to its peak in the 1970s, and then to its faltering pace after the collapse of the bubble economy...

It is not difficult to see that in this era full of new technologies and new models, the former manufacturing giants are no longer the same. If the companies that survive on "ancient achievements" do not seize, grasp and seize opportunities, they will eventually be swept away by the huge waves...

01 The rise and fall of a century-old giant:

In 1875, during the Meiji Restoration in Japan, a repair shop and factory opened in Ginza, Tokyo, and this was also the place where the dream of the booming Toshiba Empire began.

As Japan's leading technology company, Toshiba has created many "Japan firsts": the first radar, the first transistor TV, the first microwave oven, the first color video phone, the first DVD... The most talked-about of these is the world's first laptop computer T1100 developed by Toshiba in 1985. With its compact appearance, it became a pioneer in mobile office.

In 1996, Toshiba ranked 32nd on the Fortune 500 list with revenue of US$53 billion, which shows how glorious it was back then.

White goods also made Toshiba a "national brand" in Japan. Since the 1970s, Toshiba, Panasonic and Sharp have been known as the "three giants of Japanese white goods", and its washing machines, refrigerators and televisions are deeply loved by the public.

In addition, Toshiba is an important part of Japan's economic lifeline. As a heavy industry giant, Toshiba is involved in many fields such as nuclear energy, infrastructure, transportation, and electricity. Its technology and equipment level is world-leading and it is a bastion of Japan's economic development.

However, the once prosperous manufacturing giant is facing an unprecedented survival crisis, which can be attributed to five fatal injuries.

The aftereffects of nuclear power are difficult to eliminate

In 2006, Toshiba spent a whopping $5.4 billion to acquire 77% of Westinghouse Electric's shares, and later increased the amount to $7 billion. Toshiba was ecstatic when it received a large number of orders at the beginning of the acquisition, and the industry also believed that owning two major reactor technologies would rewrite the history of nuclear power.

However, the financial crisis broke out in 2008, and Toshiba's nuclear power business fell into losses. Then, in March 2011, the Fukushima Daiichi Nuclear Power Plant, which Toshiba had built, suffered a leakage accident due to an earthquake. The global nuclear power market fell into a downturn, and Toshiba faced a comprehensive impact of compensation, shutdown, and trust crisis.

This gamble not only broke Toshiba's arm, but also caused it to lose even more money instead of recovering the $7 billion it had spent. It also made it miss out on the booming renewable energy market.

Financial fraud

In February 2015, Toshiba was hit by a massive financial fraud scandal that lasted for seven years and involved four departments and three consecutive presidents.

The investigation found that from 2008 to 2014, Toshiba inflated its profits by about 150 billion yen by double-counting advertising and logistics costs and obscuring the costs of components, which was three times the total profit during the seven years.

The carefully created false prosperity was exposed, and the brand reputation that Toshiba had built up over hundreds of years was destroyed. Toshiba's stock price was halved, and many senior executives resigned. The market value shrank by 40% at one point, and the financial hole was as high as 1 trillion yen. From then on, Toshiba never recovered.

It’s hard to recover from a downturn

For any industrial company, the sustainability of performance is the most critical.

However, since 2011, Toshiba's revenue has shown a clear downward trend - in 2022, its revenue plummeted to about US$29.7 billion, less than one-third of its peak.

This phenomenon runs through almost all of Toshiba's business segments, whether it is core profit points such as nuclear power and semiconductors, or service sectors such as white goods and office equipment, none of them can escape the bad luck.

The result of the continued industry downturn is that cash flow is gradually drying up, and the only option left is "surrender."

It is difficult to break up

After the financial fraud incident, Toshiba's reputation and stock price have been declining. In order to stop the bleeding, it had to start drastic cuts:

In 2015, the image sensor business was sold to Sony for 19 billion yen;

In 2016, it sold 80.1% of its home appliance business to Midea and its medical systems business to Canon;

In 2017, 95% of the shares of Toshiba TVS, which mainly deals in televisions, were sold to Hisense for 12.9 billion yen;

In 2018, 80.1% of the computer business equity was sold to Sharp for US$36 million...

However, these measures not only failed to achieve the expected "stop bleeding" effect, but instead led to the further division of Toshiba's business map, severely weakening the original industrial radiation effect, and increasingly weakening overall strength.

The life-saving straw is broken

In 2018, in order to save itself, Toshiba sold its most competitive memory chip business to a coalition of companies including Bain Capital for US$18 billion.

This was originally Toshiba's last straw.

But this time the "life-saving straw" did not work. According to the financial report, Toshiba is still losing money, with a net loss of 52.14 billion yen (about 2.6 billion yuan) in the first half of 2023 alone.

In addition to the cruelty of the times, Toshiba's missteps are also responsible for its decline.

After entering the 21st century, Toshiba is facing the choice of industrial transformation. However, in the process of abandoning low and pursuing high, it has encountered the dilemma of "not being able to achieve high and not being able to settle for low".

For example, as Japanese home appliance brands gradually declined in the Chinese market, Toshiba had to divest most of its low-value-added businesses, including white goods, while at the same time it actively entered into high-tech barrier fields such as semiconductors and nuclear power.

However, things are unpredictable, and these two emerging businesses that they had high hopes for have fallen into a quagmire: the former has encountered fierce pursuit from latecomers such as South Korea, TSMC, and Samsung, and its market share has been gradually eroded; while the latter has become a mere shell under the severe blow of the Fukushima accident.

It is particularly worth reflecting on that although Toshiba once took the lead in many cutting-edge technologies, due to internal decision-making failures, these innovative achievements ultimately did not translate into market advantages.

For example, as early as 1984, Toshiba R&D director Fujio Masuoka developed the NOR flash memory chip. However, Toshiba was not optimistic about this new technology at the time, and instead took DRAM as the core of its strategy. This directly led to it missing the opportunity to innovate global semiconductor technology, and was instead seized by latecomers such as Intel.

Similarly, in 2007, Fujio Masuoka proposed the NAND flash memory concept with greater potential. However, due to the death of the team leader, this invention was shelved again and eventually became a stepping stone for Samsung's rise.

02 Toshiba’s Robotics Ambition

Looking at Toshiba’s development history, you will find that for things outside of its business that everyone is doing, Toshiba always has a feeling that “participation is important.”

It made its fortune in precision machinery, and the same is true in the field of robotics. It has ambition but has not tried its best, and the results are disappointing.

Toshiba has SCARA robots, vertical joint robots, and rectangular coordinate robots in the field of industrial robots , and SCARA robots are its flagship products.

Toshiba's SCARA robots have the advantages of high speed, high precision, high rigidity, compact design, and compatibility with a variety of support tools. The new SCARA robot THE400 is very suitable for assembly and inspection processes such as electronic equipment and automotive parts that require high precision.

Toshiba also has a presence in consumer robots.

In 2016, Toshiba launched its first "multilingual" humanoid robot, Junko Chihira, which works as a front desk staff in a department store and can speak Japanese, English and Chinese. Its appearance is extremely similar to that of a human, and its robot skin has the real touch of a human.

In the same year, Toshiba also launched a scorpion-like robot to investigate the dangerous areas of the Fukushima Daiichi Nuclear Power Plant. It can work in an environment with radiation up to 1,000 sieverts, which can kill a person in a few seconds. With this robot, humans can work in extremely dangerous environments.

In the logistics field, Toshiba also invested in a Chinese robotics company, Suzhou Muxing Intelligent Technology Co., Ltd., this year to strengthen the value chain of its logistics solutions business.