Japanese-U.S. consortium eyed to buy Toshiba chip biz so Asia rivals can’t

JIJI

The idea of forming a Japanese-U.S. consortium has been floated to beat possible Chinese, Taiwanese and South Korean bidders in an auction of Toshiba Corp.’s flash memory business, Jiji Press learned on Thursday.

The move comes as the Japanese government and industry are eager to maintain the struggling maker’s technologies for flash memory chips, for which demand is expected to grow further.

The possible consortium may bring together Japanese financial and nonfinancial companies, including state-owned Development Bank of Japan, as well as U.S. investment and chip-making companies,sources said.

Government-backed Innovation Network Corp. of Japan may support the consortium, the sources also said.

“Leakage of the flash memory technologies to China should be prevented,” a government source said.

“We’ll decide the successful bidder, keeping in mind that this deal could affect national security,” Toshiba President Satoshi Tsunakawa told a press conference on Tuesday.

Taiwan’s Hon Hai Precision Industry Co., which acquired ailing Japanese electronics maker Sharp Corp. last year, has expressed strong interest in the Toshiba flash memory business.

South Korean chipmaker SK Hynix Inc. and a Chinese investment fund are also expected to join the race.

To cope with huge losses from its nuclear plant business in the United States, Toshiba hopes to raise ¥1 trillion to ¥2 trillion by selling most of its mainstay flash memory business that will be split from Toshiba.

For the year ending on March 31, the company expects ¥712.5 billion in losses related to the U.S. nuclear business. But the losses could reach ¥1 trillion yen if the struggling U.S. subsidiary, Westinghouse Electric Co., files for Chapter 11 bankruptcy.