Looks like financial trouble is becoming a pretty common nuisance these days! It is understandable if the heat of cash crunch is being faced by fledgling startups but large multinational conglomerates are now also being roped inside. Japanese technology giant Toshiba is currently plagued with intense financial troubles and is looking to unload its lucrative NAND flash memory chip business.
The roster of bidders for this chip business are diverse and range from rival chipmakers and technology giants to Private Equity (PE) firms. The chipmaker bidders either belong to the same memory business and are now looking to add on to their current capacity or those who’re looking to complement their current field of operations.
Recent reports suggest that Toshiba has already completed the first round of bidding for its chip business. And some pretty exciting, as well as surprising names have popped up on the list of potential buyers. Japanese publication Yomiuri Shimbun has reported that over ten foreign tech companies and funds have submitted their bids for picking up the company. This list includes Google, Amazon (yes, this hit me square in the face as well) and Apple, among others.
While the aforementioned U.S-based technology giants have submitted their bids for the chip division, the exact financial details of the same are currently unknown. The report suggests that they’ll most probably deploy Toshiba’s memory chips for bolstering their cloud services. Apple is definitely one of the potential bidders that have definitely caught my eye, who is looking to further its silicon business with this strategic investment.
But, there are others who’re bidding more aggressively to grab ahold of a business that spans 20 percent of the global NAND market. Yesterday, Japanese publication Nikkei had reported that American chipmaker Broadcom has teamed up with PE firm Silver Lake to offer $17.9 billion for Toshiba’s chip unit. Another frontrunner is Taiwan’s HonHai, who has reportedly placed a bid for more than 2 trillion yen ($18 billion), which is quite high as compared to the suggested price tag. Others who are said to be involved in the bidding procedure are Western Digital, Foxconn, Micron and TSM (Taiwan Semiconductor ) among others.
Toshiba is recognized as the second largest chip supplier in the world, just behind Korean giant Samsung. This proves the worth of the chip business, which brought in about a quarter of its 5.67 trillion yen (approx $51 billion) in revenue last fiscal year. Thus, bidders are now lined up to pick up this chip business that’ll enable the cash-deprived Japanese giant to turn around.
The sale procedure started out when furious investors called out Toshiba executives for massive cost overruns and missed deadlines on its nuclear power unit construction project. These hiccups had cost the company and added to the surmounting losses, which are now touching the higher end of $9 billion annually.