Is Apple Toshiba's newest chip bidder?

The iPhone maker may be about to supercharge its chips by joining Bain Capital's bidding consortium

Apple may be about to put in a bid to buy Toshiba's chip business, joining US private equity group Bain Capital's consortium to purchase the ailing business.

Rumours suggest that the tech giant will apparently pledge 400 billion Yen (28 million) - potentially alongside another firm - towards the bid. Toshiba's main creditors, Innovation Network Corp. of Japan and the Development Bank of Japan, would then parter with South Korean chip manufacturer SK Hynix Inc to raise the 1.6 trillion Yen (11.2 billion) needed to complete the purchase.

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It's thought Apple could be looking to invest in Toshiba's memory business to help cover a shortage of the memory chips it uses in its iPhones and iPads.

"There are supply shortages of that type of memory," Michael Walkley, an analyst with Canaccord Genuity told Bloomberg. "They're always looking to work closely with key suppliers and lock in long-term supply agreements."

Bain Capital's bidding group is currently in competetion with storage manufacturer Western Digital, which already runs the facility in which Toshiba's chips are manufactured. The company has formed a coalition of its own in order to purchese the memory unit, with investment from US investment firm Kohlberg Kravis Roberts.

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Western Digital's group is reportedly also backed by INCJ and DBJ. Despite also being linked to the Bain Capital bid, the two organisations, which are both funded at least partially by the Japanese government, will supposedly back whichever deal offers the best outcome for Japan.

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A third consortium is also involved, according to the Nikkei Asian Review, consisting of Foxconn parent company Hon Hai Precision Industries, ARM owner SoftBank Group and Google.

"The Western Digital bid looks the neatest because it theoretically removes the legal dispute that has been holding this dealmaking process back," someone familiar with the negotiations told the Financial Times.

"That clearly appeals to Toshiba's impatient lenders but there are fundamental differences to resolve and it is still some way from producing a deal that Toshiba could sign."

Toshiba will talk through the potential sale later today and whoever ends up buying the business, it's likely the company will want a quick sale so it isn't thrown off the Tokyo Stock exchange for failing to make up the $4.5bn losses caused by its nuclear unit.


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