Foxconn, TSMC Eye Joint Bid for Toshiba Memory Unit
(Beijing) — Taiwanese contract manufacturer Foxconn and chipmaker Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) will team up to make a joint bid for Toshiba Corp.’s semiconductor business, sources told Caixin Friday.
Previous reports said that Apple supplier Hon Hai Precision Industry Co., Ltd., also known as Foxconn, was trying to team up with South Korean chipmaker SK Hynix Inc. to contend with U.S. rivals Micron Technology, Inc. and Western Digital Corp.’s bid for Toshiba’s memory chip unit.
Sources from Foxconn said that it had finally chosen TSMC, also an Apple Inc. supplier, to vie for a majority stake in the unit, which is valued at $20 billion, Japanese business daily Nikkei reported.
If successful, this will be Foxconn’s first major acquisition in partnership with another company.
Sources say Foxconn strongly covets Toshiba’s flash memory business, which will complement the company’s existing display and TV units, acquired in the buyout of Sharp in March last year.
Toshiba began the bidding process for its semiconductor business early this month, putting its fast growing unit up for sale to cover over $3 billion in losses at its U.S. nuclear operations. The company hopes to earn a profit of at least 1 trillion yen ($8.7 billion) from the sale, the Nikkei reported.
Foxconn Chairman Terry Gou said earlier this month that solid-state drives were crucial to harnessing the future, and that Toshiba’s edge in the sector was “highly valued” by the company.
Sources said that Foxconn’s success in purchasing Sharp might give the Taiwanese company more credibility. However, the size of the deal means that Foxconn faces many hurdles before it can emerge as the winning bidder.
“We have learned a lot about how to deal with Japan from our buyout of Sharp Corp., and we trust this will now come in handy,” the sources said.
Foxconn’s ambitions to own part of Toshiba’s most profitable unit, seventh largest by market share in the sector, may lie in the hands of regulators, according to consultancy Gartner.
Earlier reports from Reuters said that Foxconn was not a favored candidate due to the company’s close ties with China, and that the Japanese government would consider invoking trade laws to control the auction in the name of national security if needed.
Contact reporter April Ma (firstname.lastname@example.org)
Jul 16 17:58
Jul 16 17:19
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