Published: Thu, April 20, 2017
Electronics | By Jesus Weaver

Western Digital would consider Japan partners for Toshiba chip unit bid

Western Digital would consider Japan partners for Toshiba chip unit bid

The Japanese government wants a local company to buy Toshiba's chip business, and Japan's chief cabinet secretary Yoshihide Suga had earlier said flash memory chips are "extremely important" for Japan's growth strategy.

A Japanese government-backed fund and policy bank are considering a joint bid with Broadcom Ltd for Toshiba Corp's semiconductor business, a move that would vault the USA chipmaker into the lead to buy the prized unit, the Asahi newspaper said on Wednesday.

Broadcom put in the highest first round bid of ¥2.5tn ($23bn).

But with government officials wary of Toshiba Memory being acquired by Hon Hai, the latest move was made to create a strong counter-bid from the Japan-U.S. coalition.

Asked whether a joint bid was possible, Long said, "It could be". Western Digital, a bidder for Toshiba Memory and the owner of SanDisk, is demanding exclusive negotiations as a result.

Toshiba has narrowed the field of bidders for its chip unit to four suitors, sources have said: US chipmaker Broadcom Ltd (AVGO.O), which has partnered with private equity firm Silver Lake Partners LP; SK Hynix (000660.KS); Western Digital (WDC.O); and Foxconn (2317.TW), the world's largest contract electronics maker.

Apple having a significant stake in the business, which makes flash storage chips, would allow the company to reduce its dependence on Samsung.

Foxconn was also said to be talking to Japan's SoftBank to increase the positivity of its perception in Japan and obtain credit from Japanese banks.

The sources said INCJ and DBJ are considering investing in the business as a minority partner - a move that would help the government prevent a sale to bidders it deems risky to national security. It can not bid on its own.

But another US bidder, chipmaker Broadcom Ltd AVGO.O , is also in talks with INCJ and DBJ for a joint bid, sources told Reuters, potentially vying with Western Digital for government backing. DevOps, continuous delivery and containerisation.

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