The history of the legendary Toshiba corporation, which has become synonymous with electronics

Toshiba survived World War II and several economic crises, but was never able to recover from the crisis within the company itself. A series of scandals led to the fact that the Japanese manufacturer had to first change management and then owners. Late last year, after 74 years of glorious presence on the Tokyo Stock Exchange, the legendary electronics manufacturer once again became a private company.

Breakthrough and innovation

In 2025, Toshiba hopes to celebrate its 150th birthday. Only a few survive to such a respectable age, despite the fact that millions of companies are created in the world every year. For Japan, Toshiba is not just a company – it is one of the symbols of the country’s revival and prosperity.

In the middle of the 19th century, Japan was a purely agrarian country isolated from the outside world. There was no industry, no advanced technologies for that time here. Japan needed a revolution, and not so much a political one, but a revolution in the way of life. This was the Meiji Revolution – a series of political and economic reforms in 1868-1889.

One of those who helped Japan transform from an agricultural and technologically backward country into one of the largest and most developed economies in the world was Tanaka Hisashige, the great Japanese inventor.

He received his first recognition at the age of 20 thanks to his mechanical dolls, which were capable of performing complex movements. Dolls were ordered by aristocrats and even the imperial court. In the 1830s, Hisashige invented the pocket candlestick and oil lamp with fuel pump, which proved very popular. And in 1851 he created the iconic “Clock of Myriad Years” for Japan, capable of working in one factory for a whole year and having seven indicators at once.

In 1853, when the Russian vice admiral and diplomat Evfimy Putyatin arrived in Japan, Hisashige attended a demonstration of the Russian steam engine in Nagasaki. Armed with a Dutch reference book and inspired by what he saw, the Japanese inventor set about creating a Japanese analogue. And he succeeded.

And in 1873, when Tanaka was already 74 years old, he received an order from the Japanese Ministry of Public Works. Tom urgently needed to provide the country with telegraph communications. Hisashige accepted the offer and in 1875 opened a telegraph equipment factory in Tokyo. The plant was managed by the Tanaka Engineering Works company established for this purpose. She will become the first of two parents of the Toshiba corporation.

The second father of Toshiba was another Japanese inventor, Ichisuke Fujioka, who in 1878, while still studying at the Imperial College of Engineering, developed Japan’s first incandescent lamp under the guidance of visiting professor William Ayrton. Considering that at that time Japan had to import electric lamps, the invention was of enormous importance. After completing his studies, the young engineer founded the Hakunetsu-sha Co. lamp manufacturing company in 1890.

Things didn’t go very well for Fujioka at first. The opening of the border led to a flood of Western goods and technology into Japan. This was a good thing for the development of the country, but it was difficult to withstand competition with foreign suppliers of Hakunetsu-sha lamps. Its products were 60% more expensive than imported ones, and were inferior in quality to imported samples.

The company managed to stay on the market for several years, largely thanks to the wars waged by the empire. But by 1905 it became obvious that it was unrealistic to survive on military orders alone. The Japanese company was given a lifeline by the American General Electric, which was interested in localizing production and developing a fast-growing market. Hakunetsu-sha sold 51% of its shares to GE and was renamed Tokyo Electric Company.

The road through turmoil

Both companies were at the forefront of the development of the electrical equipment market in Japan, essentially fulfilling government orders for import substitution. Tanaka by that time had created the first Japanese turbine generator with a water wheel, the first induction motors, and the country’s first electric fans. And in the 1920s, the company, renamed Shibaura Engineering Works, began to explore new markets. At the same time, the company began producing household appliances – refrigerators, washing machines and vacuum cleaners.

As for Tokyo Electric, at first General Electric transferred its own production technologies to its Japanese partner so that it could supply a competitive product to the market. But in 1921, Tokyo Electric presented its own development – an electric light bulb with two antennae, innovative for the whole world.

Trying to find words to motivate people to restore production that was almost completely destroyed by the Great Kanto Earthquake of 1923, the president of Tokyo Electric used the analogy of antennae. “A plant without a research institute is like an insect without antennae,” said Fujioka. And the company, which had lost factories and many employees, set about restoring its previous production and creating a new one.

The companies had barely recovered from the natural disaster when a new test awaited them. Due to the military confrontation with China that began in 1931, the Japanese government imposed a ban on the production of household appliances, as it wanted to preserve vital reserves of metals for military needs.

Hard times have come for the entire Japanese economy, but the government has not abandoned to their fate those who have ensured the rapid transformation of the country all these years.

Shibaura Engineering Works and Tokyo Electric entered the war effort, supplying the army with radios, generators and other goods. And the great shock that left many businessmen with nothing made the companies even stronger.

Their scope of activity expanded – they became suppliers of the first fluorescent lamps, radars and gas turbines for generating electricity in Japanese history. And government orders ensured rapid revenue growth. Both companies were part of the Mitsui conglomerate and owned shares in each other. And in 1939 they took the next step – they merged into Tokyo Shibaura Electric Co. The name was later shortened to Toshiba.

Toshiba as synonymous with electronics

Having survived the war, Toshiba began to grow as rapidly as the entire Japanese economy, which eventually became the second largest after the American one. At the same time, the company developed not only through improving technology, but also through constant mergers and acquisitions. Toshiba’s expansion has reached such a scale that even the Japanese government had to intervene in this process. In 1949, it decided that Toshiba was obliged to immediately sell 14 companies that were part of the group at that time, so as not to violate antitrust laws. And then, in May 1949, a significant event occurred in the history of the company – its shares began to be traded on the Tokyo Stock Exchange.

However, Toshiba’s expansion continued. The corporation acquired one company after another, developing new areas of activity. It seemed that Toshiba produced everything.

The first Japanese electric rice cookers are from Toshiba. The first transistor TVs were Toshiba. Color televisions, microwave ovens, nuclear turbine generators, satellite equipment and an automatic postal code reader – Toshiba was the first to create all this in Japan. The company was the first in the world to introduce a mass-produced and affordable laptop.

Toshiba seemed interested in all types of activities. Sound recording was handled by Toshiba Music Industries / Toshiba EMI / EMI Music Japan, electronics by Toshiba Electrical Equipment, chemical production by Toshiba Chemical. Electric lamps were not forgotten either. Among other things, the successor of the Tokyo Electric Company, Toshiba Lighting and Technology, was responsible for them. And there were also Toshiba America Information Systems (production of computer equipment) and Toshiba Carrier Corporation (production of air conditioners).

Thanks to ongoing acquisitions, the corporation has entered markets around the world – from Japan to Latin America. And its revenue began to amount to tens of billions of dollars a year. The icing on the cake was the 2006 takeover of the American Westinghouse Electric Company, created by electrical industry pioneer George Westinghouse.

Too big to burst

The company has gone from a small telegraph factory to a pillar of the Japanese economy and one of the world’s industrial giants. And it seemed that nothing could stop Toshiba’s expansion and prosperity. Between 2008 and 2014, Toshiba’s revenue never fell below $60 billion. But, as it turned out in 2015, the corporation’s financial performance was too good to be true. Over the years, Toshiba falsified Westinghouse Electric’s financial statements to show investors that the business’s value was only growing. And the corporation’s management knew about it.

By the standards of a global corporation, the amount of inflated profits over seven years was ridiculous – only $1.59 billion. But this was enough for CEO and President Hisao Tanaka to resign. “I understand that this is the most discreditable event in the entire 140-year history of the brand. I don’t think these problems can be overcome instantly,” he said then

In late 2016, Toshiba said it would absorb billions of dollars in costs associated with building the nuclear power plant that its U.S. unit Westinghouse Electric bought the year before. And just three months later, Westinghouse filed for bankruptcy, leaving Toshiba facing the collapse of its nuclear business and still owing more than $6 billion.

The company found itself in a difficult situation; it was threatened with forced delisting from the Tokyo Stock Exchange.

As an emergency measure, management decided to sell several divisions, including the microprocessor business and the production of televisions. In the end, the corporation managed to raise $5.3 billion by issuing new shares and selling them to new investors at a price 10% below the market price.

The measures taken made Toshiba profitable again for some time, but the scandals around the corporation did not stop. Thus, in 2021, it turned out that Toshiba management entered into a conspiracy with the Japanese Ministry of Trade in order to block proposals from foreign investors regarding the fate of the company.

The investigation began at the initiative of Toshiba’s largest shareholder, the Singaporean hedge fund Effissimo Capital Management. The fund, together with other shareholders, tried to convince Toshiba management of the need to restructure and sell part of its assets. It turned out that Toshiba management, together with officials, tried to prevent foreign investors from influencing decisions concerning the corporation. After the publication of the results of the investigation, the head of the corporation’s board of directors resigned.

Back in 2021, Toshiba received offer about the purchase by the investment fund CVC Capital Partners. The volume of the deal could have been about $20 billion, but it did not take place because the board of directors “decided to abandon it.” In February, the corporation announced plans division into two companies, but this plan was already blocked by Toshiba shareholders.

The corporation, whose sales were falling from year to year, was desperately trying to find someone who would finally agree to buy out the entire business. Such a proposal was received in March of this year from a consortium of 20 Japanese companies led by the Japan Industrial Partners (JIP) fund. The transaction amount was $15.3 billion.

In September, Toshiba announced the successful completion of the buyout of a significant stake in the company by a consortium, which now owns 78.65% of the shares of the Japanese manufacturer of electronics and household appliances. And on December 20, 74 years after entering the Tokyo Stock Exchange, Toshiba went private again. Now she faces “a new future with a new shareholder.”

Kirill Sarkhanyants