Toshiba searches for a new ‘spine’

TOKYO — Toshiba faces something of an identity crisis. Semiconductors have been the conglomerate’s cash cow, but it is selling its flash memory unit to shore up its tattered finances. Somehow, the company needs to find a new calling and a new growth strategy.

Its best hope may be technology that has been helping the very business it is selling.

Toshiba on Sept. 28 signed a formal agreement to unload the memory unit to an American-South Korean-Japanese consortium led by U.S. investment fund Bain Capital, though the conglomerate will retain an interest. The sale holds the key to escaping negative net worth but will cause Toshiba’s earnings to plunge. None of its other units clear the 100 billion yen ($886 million) operating profit threshold.

As one Toshiba employee put it, “We are seen as a semiconductor company on the stock market, and I wonder what we will retain after the sale” of Toshiba Memory.

The future might just hinge on something Toshiba calls Spinex — an internet of things “architecture” combined with artificial intelligence. The company chose the name out of the belief that the technology will support its business, much like the spine of the human body.

Engineers sing the praises of Spinex at Toshiba Memory’s flagship plant in Yokkaichi, in Japan’s Mie Prefecture. They say the technology helps them quickly pinpoint defects, dramatically improving the efficiency of inspections.

The plant has a large server that processes some 2 billion slices of data from production and transport facilities every day. It used to take engineers an average of six hours to find the roots of defects, but Spinex has cut the time to less than two hours. The system has also automated more than 80% of the inspection process, up from less than 50%.

Rival Japanese tech companies such as NEC and Fujitsu have been striving to harness the internet of things, too. But a Toshiba executive sounded confident that the company’s “manufacturing experience” can help it compete.

By adopting Spinex at the Yokkaichi plant and other group facilities, Toshiba is trying to prove to potential clients that the technology really does streamline manufacturing.