SK Hynix says Toshiba wants it to bid for memory chip business

Joanna Estrada
March 18, 2017

SK Hynix said Tuesday that Toshiba had offered it a new plan for the purchase of a controlling stake in its memory chip business which analysts say could change the landscape of the industry.

According to local reports, teams from the two sides have been working in Japan to compile the documents required to submit a first-round bid by the March 29 deadline.

The report also cited unnamed sources close to the deal as saying that Hon Hai and TSMC have signed a non-disclosure agreement on the joint bid, the proceeds from which the Japanese firm plans to use to offset the impact of losses caused by its nuclear energy business in the US market.

In February, a board meeting at Toshiba approved a proposal to spin off its semiconductor operations, which operate under the name Toshiba Memory.

The Korea Herald report said that the acquisition of a 100 percent stake in Toshiba Memory could cost about US$8.7 billion, but SK Hynix is only sitting on about US$3.4 billion in cash and cash equivalents, so Hon Hai is likely to extend a helping hand to the South Korean firm. Toshiba originally hoped to sell a minority stake in the business, but later said it would consider selling most, or all, of the new flash unit. Possible buyers in Taiwan include Hon Hai and TSMC, the report added. According to Foxconn chairman Terry Guo, the company is interested in pushing into the flash memory industry as storage demands will increase as screen resolutions go up. Its bidding price is estimated at about 3 trillion won (US$2.62 billion).

Apple, SK Hynix, Western Digital, and Micron Technology have also been named as parties potentially interested in acquiring Toshiba's memory business.

According to DRAMeXchange, Samsung reached a whopping $14.151 billion in NAND flash memory sales alone past year.

Toshiba is the world's second-largest maker of NAND flash memory chips, mainly used in smartphones and other mobile devices.

Other reports by Click Lancashire

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