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(Bloomberg) — Toshiba Corp. said Chief Executive Officer Nobuaki Kurumatani will be replaced by Chairman Satoshi Tsunakawa, an abrupt leadership reshuffling that casts doubt on potential buyout offers for the $20 billion Japanese icon.Toshiba said the changes are effective immediately in an announcement Wednesday. The company will soon begin considering successors for Tsunakawa, who returns to the CEO job he held previously, said Osamu Nagayama, chairperson of the board, during a press conference in Tokyo.The decision came as factions within the conglomerate mounted resistance to a potential buyout offer from CVC Capital Partners — where Kurumatani previously worked. Some executives felt the offer undervalued a storied Japanese corporation that still holds valuable energy and semiconductor assets, according to people familiar with matter, who declined to be identified discussing internal issues. Separately, private equity firm KKR & Co. is exploring a rival offer for Toshiba, Bloomberg News reported.“The optics, combined with the facts that CVC’s bid is now supposedly lower than KKR’s, and that CVC lacks experience with deals of such scale, probably mean it is out of the running,” said Mio Kato, an analyst with LightStream Research who publishes on Smartkarma.Nagayama, the Toshiba board chairperson, said he isn’t sure whether Kurumatani’s resignation will affect talks with CVC because the offer is “very preliminary and not formal.” He noted CVC voiced support for current management while Kurumatani was in charge. The company’s shares rallied after news of KKR’s possible bid, but then pared those gains to close 5.8% higher.Kurumatani suffered a sharp drop in support among the company’s executives and other staff. Employees who have confidence in the CEO fell to less than 60% in an internal January poll, down from more than 90% last year, Bloomberg News reported this week. More than 20% expressed a lack of confidence in his leadership, up from less than 5% previously.The survey results prompted Toshiba to conduct detailed interviews with a narrower group of about 30 top executives and more than half of them expressed a lack of confidence in Kurumatani.“Kurumatani’s resignation settles some issues, gives the new CEO some breathing room and the benefit of the doubt as long as he makes the right noises,” said Travis Lundy, an independent analyst who publishes on Smartkarma. “It will improve morale slightly internally as well. But the issues that have caused problems with shareholders are also at the board level.”The loss of confidence in Kurumatani was due in part to his decision to stick with three-year targets set in 2018, one of the people said. Many executives thought those goals were no longer realistic because of the Covid-19 pandemic and feared pressure to meet them resembled the rigid attitude of his predecessors, which led to an accounting scandal, the person said.In the press conference Wednesday, Nagayama said the CEO was leaving because the company had made its return to the first section of the Tokyo Stock Exchange.“Kurumatani offered his resignation as he feels his job to rehabilitate Toshiba is done with the return to the TSE’s first section,” Nagayama said. “We appreciate his efforts.”He said Kurumatani chose not to attend the press conference. The departing CEO did leave a letter, which a Toshiba spokesman read aloud.Kurumatani faced opposition outside the company too. He held on to his position by a slim margin last year, when only 57.2% of Toshiba shareholders approved of keeping him in the job. Questioning the transparency and process of that vote, Toshiba’s largest investor Effissimo Capital Management has requested an independent investigation, which was green-lit at an extraordinary shareholder meeting in March.​KKR is weighing a bid that would be likely to value Toshiba above the $21 billion buyout proposal that it’s already received from CVC, said one person familiar with the matter, who asked not to be identified as the details aren’t public. Canadian investment giant Brookfield Asset Management Inc. is also in the preliminary stages of exploring an offer for the company, including how such a bid might be structured, a separate person with knowledge of the matter said.The deliberations are at an early stage, no final decisions have been made, and the discussions may not lead to firm offers, the people said.Tsunakawa, the returning CEO, spent time during the press conference Wednesday offering reassurances that Toshiba would remain a strong Japanese company and invest in research and development. His comments appeared aimed at reassuring employees and business partners in the wake of the CVC offer.He also discussed Toshiba’s stake in Kioxia Holdings Corp., the memory chip business in which Toshiba sold off a majority stake. Tsunakawa said Toshiba would not sell its remaining holdings to a foreign semiconductor firm and that he anticipates the company will go public. The Wall Street Journal reported that Micron Technology Inc. and Western Digital Corp. are each exploring a potential deal for Kioxia.“We remain committed to provide our support to Kioxia’s IPO, and our stance on selling our holdings is unchanged,” he said.(Updates with chairperson’s comments from the fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Micron (MU) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

(Bloomberg) — President Joe Biden told companies vying with each other for a sharply constrained global supply of semiconductors that he has bipartisan support for government funding to address a shortage that has idled automakers worldwide.During a White House meeting with more than a dozen chief executive officers on Monday, Biden read from a letter from 23 senators and 42 House members backing his proposal for $50 billion for semiconductor manufacturing and research.“Both sides of the aisle are strongly supportive of what we’re proposing and where I think we can really get things done for the American people,” Biden said. “Now let me quote from the letter. It says, ‘The Chinese Communist Party is aggressively — plans to reorient and dominate the semiconductor supply chain,’ and it goes into how much money will be they’re pouring into being able to do that.”Chief executives including General Motors Co. CEO Mary Barra, Ford Motor Co. CEO James D. Farley, Jr., and Sundar Pichai, CEO of Alphabet and Google participated in the virtual summit.White House Press Secretary Jen Psaki said the meeting showed the administration is serious about addressing supply-chain constraints and softening the blow for affected companies and workers.National Economic Council director Brian Deese and National Security Adviser Jake Sullivan hosted the meeting, with Commerce Secretary Gina Raimondo also participating. Companies invited to join included Dell Technologies Inc., Intel Corp., Medtronic Plc, Northrop Grumman Corp., HP Inc., Cummins Inc., Micron Technology Inc., Taiwan Semiconductor Manufacturing Co., AT&T Inc. and Samsung Electronics Co., as well as GM, Ford and Alphabet Inc.Intel CEO Pat Gelsinger said in an interview after the meeting that the White House and Congress are working aggressively to support the semiconductor industry with more domestic manufacturing, research and development as well as efforts to build the workforce. Taiwan’s TSMC also voiced its support. The contract chipmaker, which plays a central role in manufacturing most of the world’s most advanced semiconductors, has secured government incentives to begin building a $12 billion Arizona plant this year.“TSMC is confident that our 5nm advanced fab plan in Phoenix Arizona — one of the largest foreign direct investments in U.S. history — will be successful in partnership with the U.S. government,” it said in a statement.The administration intended to highlight elements of the president’s proposed $2.25 trillion infrastructure-focused plan that they believe would improve supply-chain resilience, a White House official said. The agenda also included discussions about the auto industry’s transition to clean energy, job creation and ensuring U.S. economic competitiveness, the official added.Many of the lawmakers supporting additional funding for semiconductors want to see the measure in a standalone competitiveness bill aimed at China, not as part of Biden’s infrastructure package, as it is now. The China bill has some bipartisan support and could have a quicker path through Congress.Intel, Micron, GM, A&T on Roster for White House Chips MeetingBut exactly how to spend and allocate the semiconductor funding is a source of debate among automakers and other consumers of chips, as well as the semiconductor companies themselves.Carmakers are pushing for a portion of the money to be reserved for vehicle-grade chips, warning of a potential 1.3 million shortfall in car and light-duty truck production in the U.S. this year if their industry isn’t given priority.Yet makers of other electronic devices affected by the chip shortage, such as computers and mobile phones, have taken issue with the carmakers’ demands, worried their industries will suffer. The debate was also a factor in the White House meeting.“There were many, many voices saying, ‘hey, we can’t just start carving things up for particular industries. We need a solution that works in the medium and long term and that are sensitive to some of the unique challenges of the immediate term,’” Gelsinger said in the interview. “I think we’re working pretty well through that process right now. Nobody will be entirely happy but we’re heading in a good direction.”The White House has not taken a public position on the issue but has indicated privately to semiconductor industry leaders that it would not support special treatment for one industry, according to people familiar with the matter.Matt Blunt, president of the American Automotive Policy Council, which lobbies for Ford, General Motors and Stellantis NV (formerly Fiat Chrysler Automobiles), expressed optimism that the Biden administration would at least consider his industry’s arguments.Congress Weighs Countering China on Chips, GOP Wary of Cost (1)He said the White House has not endorsed any specific plans for setting aside money for carmakers, but administration officials “understand why the proposal was made.”To avoid future chip shortages, Blunt’s group proposed that at least 25% of any federal support for the construction of semiconductor factories must go to U.S. facilities that commit to allocating at least 25% of their capacity to automotive-grade chips.John Neuffer, president and chief executive officer of the Semiconductor Industry Association, said the industry understands “the difficulty the auto sector is feeling right now, and chipmakers are working hard to ramp up production to meet demand in the short term.”For the long term, he said, the industry needs a boost in domestic production and innovation across the board “so all sectors of our economy have access to the chips they need, and that requires swiftly enacting federal investments in semiconductor manufacturing and research.”(Updates with TSMC’s comments from the seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

In this article we will take a look at the 10 best artificial intelligence stocks for 2021. You can skip our detailed analysis of the AI industry’s outlook for 2021 and some of the major growth catalysts for AI stocks and go directly to 5 Best Artificial Intelligence Stocks for 2021. Artificial intelligence is a […]

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