TSMC, Hon Hai mum on rumors of Toshiba joint bid

The China Post

By Christine Chou — Two of Taiwan’s biggest corporations, Hon Hai Precision Industry Co. (鴻海) and Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), declined to comment Tuesday on rumors that they will partner up to seek a majority stake in Japanese hardware firm Toshiba’s chip memory chip business. According to local reports, teams from the two sides have been working in Japan to compile the documents required to submit a first-round bid by the March 29 deadline. Toshiba, the world’s No. 2 maker of NAND chips after South Korea’s Samsung Electronics, is selling most of its chip business to recover losses in its U.S. nuclear division. Despite the firm’s overall financial woes, its memory chip unit generated US$973.5 million in profits during the fiscal year ending last March. Share sales would begin in April at the earliest but could be a fait accompli by the end of June.

The outcome of the sale will have a major effect on Apple, as Toshiba remains the largest supplier of memory chips for the iPhone, according to Nikkei. Hon Hai Chairman Terry Gou (郭台銘) said last week that Hon Hai was “very sincere” in bidding for Toshiba’s memory chip assets and confident in helping the memory chip assets grow. Industry watchers have said that Hon Hai, which is also known as Foxconn and which last year bought Japan’s Sharp Corp., may find it easier than other bidders to buy a stake as it was not a major memory chipmaker and so could avoid a lengthy antitrust review. Despite Guo promising to keep all key technologies in Japan, a Japanese report on March 4 said that some inside Japan’s Economic Ministry had voiced opposition to a bid by Hon Hai. The opponents argued that as Hon Hai currently runs a broad production base in China, the Taiwanese firm producing Toshiba flash memory chips on the mainland could cause semiconductor technology leaks there. Other potential suitors that have expressed interest in Toshiba’s chip unit include South Korea’s SK Hynix and U.S. firms Western Digital and Micron Technology, reports said.