Roger Fingas
The state-supported Innovation Network Corp of Japan may pursue a minority stake in Toshiba's memory business, allowing the government to block the sale of a majority stake to businesses deemed risky to national security — including two Apple suppliers, according to a report.
INCJ is keeping a watch on the sale of Toshiba's chip business but didn't get involved in the first round of bidding, chairman Toshiyuki Shiga said when approached by news agencies including Reuters. The executive also cautioned that INCJ would need an outside partner to place a bid.
The Japanese government is thought to be opposed to bids by Apple manufacturer Foxconn and memory supplier SK Hynix. Those companies are based primarily out of China and South Korea, respectively, and allowing either to take control of Toshiba's memory unit could result in not just economic benefits but key intellectual property slipping out of Japanese hands.
Foxconn may possibly be getting billions in backing from Apple, presumably because the latter would benefit from a cheaper, steadier memory supply. Foxconn already owns Sharp, an Apple display supplier.
Other bidders reportedly include U.S. firms Western Digital and Broadcom, the second in partnership with private equity firm Silver Lake Partners. Broadcom has been a long-time Apple supplier and may be working on wireless charging for upcoming iPhones.
Despite indications that Foxconn might bid up to $27 billion, Broadcom allegedly put in the top bid during the first round, valued at $23 billion. Foxconn is said to have offered closer to $18 billion, but might conceivably raise its offer later.
Malcolm Owen
Christine McKee
Charles Martin
William Gallagher
Amber Neely
2 Comments
I have not seen any good reasons presented why Apple would back Foxconn in this purchase, there is lots of reason Apple would not want Foxconn in the middle of this business. Western Digital make more sense, they already own San Disk and San Disk and Toshiba have 49/51 JV for the foundry which makes the Flash chips. Toshiba owns the foundry and San Disk owns lots of the technology. WD would like to get their hands on both pieces if they could. With all the crap going on with North Korea I can see why the Japan Government would not want Hynix anywhere close to the Toshiba facility and most likely Hynix would want to move the assets to China. I can see Apple putting some money behind this, just now sure who they would partner with. They all appear to have downsides which could be worse than the upside.
These huge buyouts are never a good thing long term for the industry or the customers. Interesting way to block it. It's like someone is somewhat concerned about their local industry.