Toshiba memory spinoff raises tech security fears

Japanese group must give thought to blocking leaks, corporate lobby chief says

TOKYO — Toshiba‘s plan to divest its memory chip business has Japanese corporate leaders worried that critical information technology could leak to foreign companies — particularly those in China.

Yoshimitsu Kobayashi, chairman of the Japan Association of Corporate Executives and an outside director at Toshiba, raised concerns at a news conference Tuesday that key data storage technology could fall into the wrong hands.

“China is spending nearly 10 trillion yen [$90.4 billion] to develop 3D NAND memory,” which is “a core technology” for cybersecurity, artificial intelligence and the so-called internet of things bringing everyday objects online, Kobayashi said.

“Is it really acceptable to simply let go of such important technology?” he asked. “The answer is no.”

The Japanese conglomerate will spin off its memory operations — a core business that commands a significant global market share — on Saturday as Toshiba Memory and sell a majority stake in the unit to cover hefty losses linked to U.S. subsidiary Westinghouse. The NAND flash memory chips that Toshiba makes are key components of servers and other data storage devices, and thus play an important role in managing sensitive information.

Toshiba and Western Digital of the U.S., the world’s No. 2 and No. 3 makers of NAND memory behind Samsung Electronics, currently cooperate on research and production in this area. Kobayashi noted this partnership and said it is crucial that Toshiba consider how to block technological leaks “at that level,” given the “important part” the technology plays the so-called fourth industrial revolution driven by IT in manufacturing.

(Nikkei)

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