Apple and Amazon to ‘chip in funds’ with Foxconn to buy Toshiba’s memory business

7 Jun

By Anmol Sachdeva, The Tech Portal

Toshiba’s financial troubles have pushed the technology giant to offload its NAND memory business to a third-party, even when it’s facing some amount of retaliation from its widely-known partner Western Digital (WD). The front runners for the acquisition of the complete (or majority stake) in the said division are Foxconn, Broadcom, and several others. This has driven the bid value to as high as $28 billion, as compared to the division’s $18 billion valuation.

Citing sources privy to the development, Nikkei Business Daily (via Reuters) reports that Apple and Amazon are helping out their primary contract supplier with the capital required to make the monstrous bid to buy Toshiba’s memory unit. This is not another speculation but has been confirmed by Foxconn Chairman Terry Gou, who on Monday said that both U.S-based technology giants will ‘chip in funds’ to back the transaction. In an official statement, the company said:

Foxconn can confirm that we have submitted a bid for Toshiba’s chip business with a number of strategic partners.

It was first learned back in March of this year that Foxconn was also gunning for Toshiba’s burgeoning NAND memory business under its original name — Hon Hai Precision Industry Co., Ltd. It wants to expand its scope to the development of flash storage chips, and has already submitted a competitive bid of $27 billion in an attempt to beat out its rivals.

It is now calling upon its long-standing partners to most likely seal the deal by increasing the asking price to something Toshiba can’t deny. Foxconn, for those aloof, is one of the most versatile and occupied contract suppliers in this hardware industry. It is mostly known to all as the primary contract manufacturer of the iPhone but it also manufactures Amazon’s Kindle lineup, Sony’s PlayStation 4, as well as Toshiba’s TV and PCs.

There is currently no confirmation but several reports floating across the interwebs suggest that Apple is planning to buy out an individual, direct stake in the memory business. It is highly possible that Cupertino and Amazon may be financing the transaction but it could also take the form of direct investment, where Apple is looking to pump ‘several billion dollars‘ into the business. This will enable both the additional participants to gain instant access to cheap and updated NAND technology for their new hardware devices.

But, there are other hardware giants who’re aggressively bidding to grab ahold of an establsihed business that spans 20 percent of the global NAND market. It has been reported that American chipmaker Broadcom has teamed up with renowned PE firm Silver Lake to offer $17.9 billion for Toshiba’s chip unit.

Toshiba is recognized as the second largest chip supplier in the world, just behind Korean giant Samsung. This proves the worth of the memory business, which brought in about a quarter of its 5.67 trillion yen (approx $51 billion) in revenue last fiscal year. Thus, bidders are now lined up to pick up this chip business that’ll enable the cash-deprived Japanese giant to turn around.