Apple may team up with Foxconn to bid for Toshiba's chip business

Brittany BishopApr 15, 2017

Shares of Toshiba were partially buoyed this morning following a report that Apple is considering taking a major stake in the Japanese company's semiconductor business.

The Cupertino-based company is reportedly looking to invest several billion dollars to acquire a more than 20% stake, which would enable Toshiba to maintain a partial stake in order to the business both under United States and Japanese control.

The report said Apple is also considering a joint bid with Foxconn Technology, which manufactures the iPhone.

In early March Patently Apple posted a report titled "Bad News for Samsung: Apple Suppliers TSMC and Foxconn are Joining Forces to Make a Bid for Toshiba".

Apple could not immediately be reached for comment.

The memory chip business is one of the backbones of the company.

The auction of Toshiba's prized chips asset is essential to the company's plans to cover multi-billion dollar writedowns at its USA nuclear unit Westinghouse. Also, delays in projects and costs overrun at the SC and Georgia makes it harder to face this situation.

Auditors suggest - "It is an unusual move for a Japanese company-and with a warning that the entire company could collapse".

The Yomiuri newspaper said last month that Apple was among the bidders for the chips unit. Those bidders include a team made up of chipmaker Broadcom and private equity firm Silver Lake Partners LP.

Toshiba's computer chip business is up for sale - and a slew of vendors have their eyes on the group as a potential expansion of their portfolios.

Western Digital claims that any sale of Toshiba's chip business would violate the terms of the joint venture agreement between the two companies, and it has said that it should have exclusive negotiating rights for the sale. The company lost nearly 30% in stock value year-to-date based on data from Google Finance.

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