Toshiba courts funds as SK Hynix, Micron Technology bid for chip stake: sources

Tue Feb 7, 2017 2:27am EST
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By Se Young Lee and Makiko Yamazaki

SEOUL/TOKYO (Reuters) - Toshiba Corp favors private equity bidders in the sale of a stake in its chip business, as suitors including rivals SK Hynix Inc and Micron Technology Inc vie with financial investors like Bain Capital, sources said on Tuesday.

Toshiba needs to raise funds by the end of March to offset an imminent multi-billion dollar writedown on its U.S. nuclear power business, meaning there may not be enough time to conclude a deal with another chipmaker, said one of the sources with direct knowledge of the company's strategy.

That plan, initially at least, would confound attempts by other chipmakers to buy a slice of a business that may provide an edge in the booming market for NAND flash memory chips used for long-term data storage.

Another of the sources said Toshiba could eventually seek investment from other chipmakers once its financial crisis had passed.

South Korea's Hynix, the world's No. 2 chipmaker, on Tuesday said it had submitted a non-binding bid although it gave no details on the size of the stake it wanted to acquire.

SK Hynix and Bain Capital declined to comment and Toshiba said it could not comment on specifics of the sale process. U.S. chip group Micron Technology was not immediately available for comment.

Toshiba's chip rivals would benefit from the Japanese firm's technological know-how in high-end NAND products and a boost in chip supply, analysts said. Toshiba is the world's second-largest maker of flash memory.

Interest in the stake is heating up with sources telling Reuters that bids had also come from investment funds, California-based data storage company Western Digital Corp and Micron Technology, amid a surge in memory chip prices.   Continued...

The logo of SK Hynix is seen in its plant in Icheon, about 80 km (50 miles) southeast of Seoul May 13, 2013. REUTERS/Lee Jae-Won