Foxconn founder confident of buying into Toshiba chip unit

HONG KONG • Taiwan's Foxconn, the world's largest contract electronics maker, is "very confident" it can buy into the chip business of Japan's Toshiba, company founder Terry Gou said yesterday.

He was speaking as Foxconn, formally known as Hon Hai Precision Industry, broke ground for a 61 billion yuan (S$12.5 billion) flat-screen display factory in China's Guangzhou province.

He declined to say whether Foxconn had submitted a bid for Toshiba's chip business, or how much of the business it was interested in.

"I cannot say we are for sure getting it, but we are very confident.

"We are also very sincere," Mr Gou said.

"Money should not be the only thing (for Toshiba) to consider... We can help its technology to be sold in products all over the world. That is Foxconn's advantage."

He said as Foxconn is not a chipmaker, there would be no anti-monopoly issues.

Industry watchers have said Foxconn, which last year bought control of Japan's Sharp Corp, may find it easier than other bidders to buy a stake as it is not a major memory chipmaker and so could avoid any lengthy anti-trust review.

Toshiba is considering selling the majority - or all - of its marquee flash-memory chip business, as it seeks to fill a multibillion-dollar hole in its nuclear business.

Toshiba is the second-biggest Nand chip producer after South Korea's Samsung Electronics.

Other potential bidders that have expressed interest in the chip unit include South Korea's SK hynix, Western Digital and Micron Technology, sources said.

Toshiba is seeking bids that value it at about 1.5 trillion yen (S$18.6 billion), according to sources.

The Japanese conglomerate is offering a majority stake in the chip unit and would be willing to sell the entire business, said the sources.

Toshiba is reeling from losses in its United States nuclear division and is selling assets to stabilise its balance sheet. President Satoshi Tsunakawa originally sought to sell a minority stake in the highly-prized memory chips business, but has been forced to give up control due to the financial troubles.

Whatever it raises from the sale, Toshiba will likely be dropped from the first tier of the Tokyo Stock Exchange.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on March 02, 2017, with the headline 'Foxconn founder confident of buying into Toshiba chip unit'. Print Edition | Subscribe