TDK, Share Price Falls on News of Potential Sale

TDK shares plummeted in Tokyo on Monday, losing 8.6% of their value after a report that the Japanese technology giant is considering selling its recording media business.

The Nikkei business daily reported on Sunday that TDK is in talks with several potential buyers, including private equity firms and rival electronics companies. TDK's recording media business, which includes the production of magnetic tapes and optical discs, has been struggling in recent years due to the decline in demand for physical media.

TDK has not confirmed the report, but analysts say the sale of the recording media business would make sense as the company focuses on its more profitable segments, such as electronic components and energy devices.

The potential sale of TDK's recording media business comes at a time when the industry is undergoing a major transformation. The rise of streaming services has led to a sharp decline in the demand for physical media, and many companies are looking to sell off their recording media operations.

In 2021, Sony sold its recording media business to the private equity firm Apollo Global Management for $1.1 billion. And in 2022, Toshiba sold its recording media business to the Chinese company Kioxia for $2.1 billion.

If TDK does sell its recording media business, it will be the latest in a long line of companies to exit the industry. The sale would also mark a significant shift for TDK, which has been a major player in the recording media market for decades.

TDK's recording media business has been struggling in recent years due to the decline in demand for physical media. In 2021, the company reported a loss of 10.2 billion yen ($94 million) in its recording media division.

The sale of the recording media business would allow TDK to focus on its more profitable segments, such as electronic components and energy devices. The company has been investing heavily in these segments in recent years, and it is expected to continue to do so in the future.