Foxconn willing to pay $27 billion for chip business
Toshiba and the Japanese government want to sell the company’s semiconductor business to a domestic buyer, but foreign bidders are proving more determined and aggressive as the auction heads toward a final decision in the coming weeks.
Taiwan’s Hon Hai Precision Industry, South Korea’s SK Hynix and chipmaker Broadcom have all submitted preliminary bids for the Toshiba business valued at 2 trillion yen ($18 billion) or more, people familiar with the matter said. Hon Hai has indicated it may pay as much as 3 trillion yen, in part to force Japanese management into negotiations, said one of the people, asking not to be identified because the matter is private. Hynix is in talks with Japanese investors on a joint bid, in part to overcome political hurdles, the person said.
Toshiba and government officials are planning to seek offers led by Japanese acquirers, though none has emerged yet, people familiar with the matter have said. The company could seek a bailout through what’s known as hougacho-hoshiki, or a form of community financing in which multiple domestic companies chip in a small amount of capital, one of the people said. Fujifilm Holdings may consider participating once it understands the investment framework, said spokesman Takao Aoki.
Toshiba is selling off assets as it grapples with billions of dollars in losses from its Westinghouse nuclear division. The Tokyo-based electronics conglomerate has more than 600 different businesses in everything from elevators to light bulbs, but its most valuable asset is the semiconductor business, which makes flash-memory chips used to store data in mobile phones and other devices.
Yukihito Uchida, a Toshiba spokesman, declined to comment. Representatives for Hynix and Hon Hai declined to comment. Broadcom didn’t immediately respond to requests for comment outside of normal business hours. An official at a government department overseeing Toshiba’s chip sale was not available for comment.
South Korea’s SK Hynix and chipmaker Broadcom have all submitted preliminary bids for the Toshiba business valued at $18 billion or more