Why is Toshiba's Memory Chip Business so Valuable?

Angelica Greene
September 21, 2017

Toshiba has been working toward the deal since January, when the struggling company announced it would be looking for bidders to acquire its lucrative chip business in an effort to raise some much-needed capital.

"Toshiba is expected to make an official announcement soon but it is unlikely to be more than repeating its current stance that it is continuing talks with Bain and SK hynix", an SK hynix spokesperson said.

Toshiba said it had been negotiating with three potential groups to sell its memory business.

SK Hynix is South Korea's second largest chipmaker, after Samsung Electronics, and also ranks second in terms of sales in the global DRAM market.

United States private equity firm Bain Capital will lead the worldwide consortium, along with other investors such as Apple, which has reportedly invested at least $3bn.

Earlier, media reported that Toshiba was shifting back toward selling the business to a group backed by joint venture partner Western Digital.

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The Bain-led offer for the world's No. 2 producer of NAND semiconductors is worth some $22 billion, sources have said.

Toshiba confirms that the deal will complete regardless of the legal situation against Western Digital.

As Toshiba seems to have finally chose to sell its chip-making unit to a group including SK Hynix, attention is being paid to the motivation behind the South Korean chipmaker's months-long battle to reach a deal with the Japanese conglomerate's troubled memory business.

A representative for Western Digital was not immediately available for comment. One consortium included Bain Capital, the Innovation Network Corporation of Japan and the Development Bank of Japan. Bain is thought to have support from Apple, Dell and SK Hynix, as well as other memory consumers.

Toshiba needs to sell the division to help coverthe costs of its.S. nuclear business.

Other reports by GizPress

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