Japan government fund, bank mull bid for Toshiba chip unit

Gwen Vasquez
April 20, 2017

SK hynix is estimated to have suggested 2 trillion yen (US$18.4 billion) for the deal, while Japanese media reported Taiwan's Hon Hai Precision Industry Co. has offered 3 trillion yen.

The Taiwanese company, known as Foxconn Technology Group, apparently believes that the participation of Sharp into its bid will help alleviate concerns in Japan about a possible outflow of sensitive technologies overseas, sources familiar with the situation said. The latest players said to be lining up potential bids are Apple and Google.

Japanese giant Toshiba is trying to flog its NAND-chips-to-SSDs memory biz in whole or in part because it's making galactic-scale losses on its Chapter 11-filed USA nuclear power station business, Westinghouse Electric, and needs cash to recapitalize itself and so prevent a looming financial catastrophe.

South Korea's major chipmaker SK hynix joined forces with USA private equity firm Bain Capital to take over the memory division of Japanese tech giant Toshiba Corp., market sources said on April 19.

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The other bidders are South Korea's SK Hynix and USA chipmaker Western Digital Corp, which has a joint venture in Japan with Toshiba's chip unit.

Apple having a significant stake in the business, which makes flash storage chips, would allow the company to reduce its dependence on Samsung. Both things would lessen Japanese government worry about Foxconn getting hold of prized Japanese economic assets.

The state-backed fund Innovation Network Corp of Japan is looking at the auction of Toshiba Corp's 6502.T chip unit but did not participate in first-round bidding, INCJ Chairman Toshiyuki Shiga said on Tuesday. It can not bid on its own. Western Digital, a bidder for Toshiba Memory and the owner of SanDisk, is demanding exclusive negotiations as a result.

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