Roger Fingas
Two of Apple's main supply chain partners — Foxconn and TSMC — are joining together to bid for a majority stake in Toshiba's memory business, a report said on Tuesday.
The companies have a team in Japan preparing document submissions prior to a first round of bidding on March 29, according to the Chinese-language Liberty Times, quoted by DigiTimes. It's not clear why the two businesses would join together, but it's suggested that TSMC could be able to take on Samsung Electronics for dominance in the flash memory market.
The corporations might also theoretically be trying to reinforce their close connections with Apple. Foxconn is Apple's primary manufacturer, and also owns Sharp, which provides some displays. TSMC, meanwhile, produces the A-series processors used in iPhones and iPads.
A controlling stake in Toshiba's memory business might boost Apple's inclination to stay with the pair, since it might have access to a more consistent memory supply — possibly at lower prices.
Foxconn, TSMC, and Apple itself have previously been identified as potential bidders, but until now it was assumed that the companies were working separately, or at least in a looser arrangement. On March 1, Foxconn chairman Terry Gou stated that he was "very serious" about bidding for Toshiba Memory, without mentioning anything about TSMC.
Other companies pursuing a stake are thought to include Microsoft, SK Hynix, Micron, and Western Digital. SK Hynix and Micron — also Apple suppliers — may be weaker candidates, since they're already in the flash memory industry and could be subject to antitrust scrutiny.
While Toshiba's memory business is highly profitable, other divisions have suffered major setbacks, owing to accounting scandals and more recently a projected $6.3 billion loss in the nuclear segment.
Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
4 Comments
IF this is true, then it supports my disinclination to believe that Apple would bid to buy this themselves. Why? Too expensive, and Apple has shown no interest in becoming a manufacturer of memory since they cut out of their deal with Samsung several years ago to build a memory plant together because of Samsung's conviction at the time for price fixing LCD panels.
i could see Apple doing this as part of a consortium of companies. But spending $18 billion is a lot of money for just memory production. And then Apple would be responsible for R&D in memory to keep up with other memory manufacturers, plant expansion, possibly, or selling excess memory when it exceeds their own needs, or to keep the plants profitable. I doubt Apple wants to become a memory supplier to others.
I suspect Foxconn and tsmc with an Apple cash contribution in return for a well priced product
"...DigiTimes..."
Sigh.
I'm sure Apple will quietly 'pitch in' to secure a priority for supply. Apple will not invest directly because there is risk in this competitive commodity industry plus possibly spillover from Toshibia's exposure in its Westinghouse/nuclear dealings and accounting sheningans (I love that word)... so best to keep distance.