Home > Industry > Apple iPhone Maker Bids A$37 To Rescue Toshiba

Apple iPhone Maker Bids A$37 To Rescue Toshiba

Their PC business is all but dead, but this has not stopped leading Taiwanese technology Company Foxconn bidding A$37 Billion for Toshiba’s computer-chip business.

Foxconn Technology the Company who last year acquired Sharp is setting themselves up as a global manufacturer of components a move that could benefit their biggest client Apple, their bid is believed to be higher than most other bidders.

If successful the bid could be an embarrassment for the Japanese Government as yet another core technology asset is taken over by a “foreign” Company.

(FILES) This file picture taken on June 7, 2010 shows the headquarters of Taiwanese electronics giant Hon Hai, the parent company of Foxconn, in Tuchung in northern Taiwan. Embattled electronics giant Sharp has accepted a multi-billion-dollar bailout from the parent company of Taiwan’s Foxconn, local media reported on February 25, 2016, in what would be a rare foreign takeover of a Japanese firm. AFP PHOTO / FILES / PATRICK LIN

The latest bid by Foxconn, formally known as Hon Hai Precision Industry will put the government of Japanese Prime Minister Shinzo Abe in a tough spot. Some in the government are hoping to see a Japanese company or a joint U.S.-Japan team take the prized Toshiba asset because they see the chip business as strategic, say people familiar with the matter.

A government official said Japan would be opposed to any mainland Chinese bidder for the Toshiba chip business because Tokyo fears China might leverage Toshiba’s technology to become a major industry player and perhaps even put spyware on chips. The main product of the Toshiba unit is called NAND flash memory, and it is used in data centres as well as consumer goods.

The problem is that the scandal plagued Toshiba, is a corporate basket case and right now any money, is beneficial to prop the ailing Company up. Analysts claim that the financially strapped Toshiba will find it hard to turn down extra cash if Foxconn has the highest bid.

Representatives for Toshiba and Foxconn declined to comment on the bidding process.

The people familiar with the bids cautioned that the process isn’t yet in the final stages. Bids can often change as contenders get a closer look at the target.

The Wall Street Journal said that in Sharp’s case, Foxconn ended up paying less than an earlier offer after it discovered unexpected liabilities.

It acquired about two-thirds of Sharp, a maker of smartphone displays and consumer products, for ¥388.8 billion in a deal that closed in August 2016.

Toshiba has said it intends to sell up to 100% of the chip business, which makes flash-memory chips for smartphones and computer servers. Battered by huge cost overruns at U.S. nuclear-reactor construction projects, Toshiba is looking to cash out assets to stay alive.

Foxconn doesn’t currently own a major flash memory maker, meaning it wouldn’t face the antitrust hurdles that some other bidders would.

Buying the Toshiba business would allow Foxconn to add another cash cow to boost growth, since memory chips are likely to be part of many internet-connected devices.

Still, some analysts say it would be a challenge for Foxconn and its chief, Terry Gou, to manage a business heavily dependent on advances in research and development—a factor that may favour bidders already in the chip-manufacturing business.

For NAND flash memory, Samsung Electronics Co. has the largest market share and the most advanced research-and-development capability, said IHS Markit ’s analyst Satoru Oyama.
Toshiba is the second-largest but faces a widening gap with Samsung, he said.

You may also like
Apple Sued For Misleading ‘Notch’ Advertising
Alcatel Snare Record 188% Sales Growth
Qualcomm Asks China To Ban iPhone XS, XR
New iPhone XS Max To Get Cheaper OLED Screen
iPhone & iPad Owners To Get Major 24Bit BluOS Audio & Netflix Streaming Update