Apple eyes backing Hon Hai bid for Toshiba chip unit

Tech giant Apple is considering backing Hon Hai's multi-billion dollar bid for Toshiba's lucrative memory chip business, a report said Saturday.

The US firm plans to financially support Taiwan's Hon Hai, which has reportedly bid some 3 trillion yen ($27.6 billion) in the initial tendering round for the memory chip business, the Mainichi Shimbun said.

Apple, which uses Toshiba's memory chips for its iPhone, hopes to secure stable supplies of the key parts by supporting Hon Hai's bid, the daily said.

Hon Hai, which acquired Japanese electronics maker Sharp last year, is separately asking SoftBank to join the team, the daily said.

The Japanese telecom company may help Hon Hai negotiate with local banks currently supporting Toshiba, it said.

Immediate confirmation of the report was not available.

Among other bidders are Google and Amazon as well as US private-equity firm Silver Lake Partners and American chipmaker Broadcom, news reports have said, quoting unnamed sources.

Local media said any foreign buyer would need to pass a Japanese government review, given concerns about security around systems already using Toshiba's memory chips.

Toshiba is the world's number two supplier of memory chips for smartphones and computers, behind South Korea's Samsung, and the business accounted for about a quarter of its 5.67 trillion yen in revenue last fiscal year.

But it plans to sell off the chip business, seen as crucial for the cash-strapped company to turn itself around, after suffering huge cost overruns and construction delays at its US nuclear power unit Westinghouse Electric, which filed for bankruptcy protection late March.

On Tuesday, Toshiba reported an unaudited loss of $4.9 billion in long-overdue financial results for the nine months to December 2016.

In announcing the earnings, Toshiba also warned of the likelihood of a worsening financial situation and said its survival was at risk.

source: AFP