Apple and Foxconn to bid for Toshiba's chip business

Apr 15, 2017, 01:18
Apple and Foxconn to bid for Toshiba's chip business

"Apple would have Toshiba keep some shares so the Japanese and United States firms combined will have a majority stake", Japan's public broadcaster NHK reported.

Moreover, rumors have been circulating in the tech ecosystem that Apple is planning to team up with Toshiba's manufacturing partner, Foxconn, that is planning to buy a 30% stake in the firm.

Apple has proposed to own a joint stake with Toshiba in order to placate the Japanese government's apprehension in Toshiba's sale of sensitive technologies to overseas bidders. Sources told the Japanese broadcaster that the iPhone maker's plan is to take a partial interest so that the semiconductor business will be controlled by both a Japanese and American firm.

Japan says they do not want important Japanese semiconductor technology to go into foreign ownership.

"Its financial problems were a major drag on the growth of its memory business", Sean Yang, research director of DRAMeXchange, said in an earlier interview.

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The memory chip business is one of the Toshiba's jewels, but is up for sale as part of Toshiba's attempts to dig itself out of a multi-billion dollar hole caused by the collapse of Westinghouse. The company has incurred billions of dollars of loss from delays and cost overruns on projects in Georgia and SC.

Any acquisition of the memory chip business faces hurdles.

In the meantime, Western Digital has already requested Toshiba that they be given exclusive negotiating rights. The remaining players include South Korea chip producer SK Hynix, Foxconn and Western Digital.

Although there seem to be plenty of eager investors for Toshiba's chip business, the sale might not come as easily as the Japanese company hopes.

There have been four main suitors for Toshiba's semiconductor business: USA chipmaker Broadcom in partnership with Silver Lake Partners, South Korean chipmaker SK Hynix; Taiwanese contract manufacturer Foxconn; and Western Digital.