Toshiba may sell chip business to Foxconn for $27bn

Image copyright AFPTaiwan manufacturer Foxconn has signalled it could mount a $27bn (£21.7bn) bid for Toshiba's chip business, according to reports. South Korea's SK Hynix and US chipmaker Broadcom have also submitted preliminary bids for Toshiba's chip business, according to Bloomberg. Toshiba has put part or all of its valuable memory chip unit up for sale to plug a gaping hole in its finances. It would not be the first bid for a Japanese firm from Foxconn, which assembles most of Apple's iPhones. Major lossesThe Japanese firm needs to raise funds after its US nuclear unit, Westinghouse, filed for bankruptcy protection last month.


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Report: Foxconn leads bidders for Toshiba's chip business with $27B offer

Hon Hai Precision Industry Co., commonly known as Foxconn, is said to be readying a massive $26.93 billion bid to acquire Toshiba Corp.'s semiconductor business. Bloomberg reported that Foxconn had also spoken to SK Hynix about the possibility of a joint bid, but Hynix rejected any possibility of a deal. However, it's likely the Japanese government would oppose any bid by Foxconn or SK Hynix for national security reasons, as it believes Toshiba's technology has strategic value. It's also being reported that other potential bidders, including Apple Inc., Amazon.com Inc. and Google Inc., are no longer in the running. Although some of the other bidders have submitted offers in the region of $18 million, Bloomberg said Foxconn has offered to pay close to $27 billion in a bid to force negotiations.




But it would be hard for financially strapped Toshiba to turn down extra cash if Foxconn has the highest bid. Foxconn Technology Group 2354, -0.98% of Taiwan has told Toshiba Corp. 6502, -2.70% that it is ready to pay as much as 3 trillion yen ($27 billion) for Toshiba's computer-chip business, people familiar with the matter said, another bold bid for a pillar of Japan's high-tech industry. The latest bid by Foxconn, formally known as Hon Hai Precision Industry Co. , could put the government of Japanese Prime Minister Shinzo Abe in a tough spot. One person familiar with the matter said the next-highest bidder after Foxconn offered about ¥2 trillion when initial bids for the business were accepted in late March. Some in the government are hoping to see a Japanese company or a joint U.S.-Japan team take the prized Toshiba asset because they see the chip business as strategic, say people familiar with the matter.


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