The move by U.S. giants comes shortly after the shareholders of Toshiba approved a proposal to split off and sell its NAND flash memory business. The Japan-based conglomerate needs around $9 billion to cover U.S. nuclear unit charges that have put a question mark on the company’s future. While the Japanese conglomerate, which was attempting diversification beyond consumer electronics, forayed into nuclear technology, the attempt backfired due to numerous project delays, which eventually led to its nuclear arm, Westinghouse Electric unit, filing for bankruptcy last week. (For more, see Toshiba's Losses at a Record as Westinghouse Files for Bankruptcy.)
The number of bidders for the lucrative semiconductor operation, which accounts for 20% of the NAND market, has now increased to 10. Other suitors include Western Digital Corp. (WDC), Micron Technology Inc. (MU), South Korean semiconductor firm SK Hynix Inc. and other investment firms. (See also, Toshiba Wants to Sell Stake in Chip Business to PE.)
While the individual bids from Apple, Amazon and Google are not yet known, another prominent U.S. private equity firm Silver Lake and U.S. chipmaker Broadcom have offered Toshiba about 2 trillion yen (around $18 billion) for the unit.
Apple, Amazon, Google to Benefit from in-house Chip Making
Apple and Samsung are the primary clients of Toshiba’s semiconductor unit.
A successful acquisition by Apple will allow it the ability to design and manufacture its own flash memory as the mobile hardware giant continues to ramp up the storage capacity of its devices. As the price of flash memory units remain high, Apple will benefit from having the manufacturing conducted in-house.
On the other hand, online companies like Google and Amazon have interest in Toshiba’s chip making unit to reduce their dependence on external chip makers and ensure supply for their own data servers through in-house manufacturing by acquiring the established leader in the field. (See also, Will Toshiba be Delisted from the Tokyo Stock Exchange?)