Although Toshiba saw strong overall results from its HDD/SSD business in 2016, it’s spinning off the lucrative NAND flash unit into a separate company. It’s a last-ditch effort to plug a gap after the firm reported a heavy one-off $6.3 billion loss in December 2016, prompting its chairman to resign.
Korean Herald cited yesterday’s report in Yomiuri Shimbun Daily claiming that Apple, Amazon and Google are engaged in a bidding war to acquire the Japanese giant’s NAND flash unit. A very diverse conglomerate, Toshiba is Apple’s top supplier of memory chips for iOS devices and files as the second-largest flash chip maker in the world after Samsung Electronics.
On Thursday, Toshiba shareholders agreed to split off the NAND flash unit and sell it.
The conglomerate’s financial stability was endangered when Westinghouse Electric, Toshiba’s US nuclear unit, filed for Chapter 11 bankruptcy protection after struggling with hefty losses that have thrown its Japanese parent into a crisis.
Westinghouse has suffered huge cost overruns at two projects in Georgia and South Carolina. Writing down Westinghouse’s US nuclear business could see Toshiba’s total losses last year exceed 1 trillion yen, or about $9.1 billion.
Shares in Toshiba have fallen more than 45 percent since late December.
Valued at between $9 billion and $13 billion, Toshiba’s memory chip unit is the second-biggest in the world after Samsung’s. Now that Apple, Amazon and Google are bidding to acquire Toshiba’s flash chip unit, SK Hynix’s chances of winning the bid have been lowered. Should SK Hynix acquire Toshiba’s memory chip unit, it will become the world’s largest NAND flash maker.
Here are the shares and movers when its comes to memory chips:
- Samsung Electronics—37 percent share
- Toshiba—18 percent share
- Western Digital—17 percent share
- Micron Technology—10 percent share
- SK Hynix—9.6 percent share
Other firms expressed interest in acquiring Toshiba’s NAND flash unit, too.
Chinese-language Liberty Times reported last month that Foxconn and TSMC could join forces in an attempt to acquire a majority stake in Toshiba’s memory chip business.
Western Digital is thought to be the most attractive bidder as the two firms jointly operate Toshiba’s key NAND flash production base in Yokaichi. “Then comes SK Hynix, which can create synergy with Toshiba as the same chip makers,” said a source.
Foxconn is the least attractive bidder as Toshiba and the Japanese government do not want to sell the firm to Chinese companies because of the technology leak concerns stemming from the fact that memory chips can be applied to military technology.
At any rate, a successful bid by one of Apple’s key suppliers, or Apple itself, could pose a great challenge to Samsung Electronics’ leadership in the flash memory market because the Galaxy maker could easily lose Apple as its main client.