Toshiba Corp. has received an offer of nearly ¥3 trillion ($27 billion) from Hon Hai Precision Industry Co. in the first round of bidding for its chip unit, sources close to the matter said Friday.
The offers signal that struggling Toshiba could raise well over ¥2 trillion for the business, which is in line with the president’s estimate.
The sale will play an integral part of Toshiba’s plan to raise cash to offset huge losses from Westinghouse, its nuclear power business.
The cash-strapped company said last month it might post a group net loss of ¥1.01 trillion for the fiscal year ended March 31 — the biggest lost ever for a Japanese manufacturer — and expected to fall into a negative net worth of ¥620 billion at the end of this March. Toshiba has delayed its earnings reports twice already.
The company aims to sell a majority stake in Toshiba Memory Corp., which was established last Saturday as a spin-off.
U.S. and Taiwanese bidders have offered ¥2 trillion to ¥3 trillion for Toshiba Memory, according to the sources.
Taiwan’s Hon Hai, also known as Foxconn, has apparently offered the highest bid, the sources said. Last year, Hon Hai became the first foreign company to acquire a major Japanese electronics maker when it took a majority stake in Sharp Corp.
U.S. suitors including investment fund Silver Lake Partners and chip maker Broadcom offered about ¥2 trillion, while no Japanese companies have joined the bidding, according the sources.
Toshiba has drawn about 10 bidders in the round that closed on March 29 and is likely to select the buyer of the chip business around July.
Toshiba is the world’s second-biggest producer of NAND flash memory chips after South Korea’s Samsung Electronics Co. The chips are used in devices such as smartphones.
The government is seeking to have the state-backed turnaround fund Innovation Network Corp. of Japan and the state-owned Development Bank of Japan make a joint bid with U.S. suitors, as it is concerned that Toshiba’s technology could fall into the hands of a foreign company deemed a threat to national security.
Minister of Economy Trade and Industry Hiroshige Seko said last month that the company’s memory chip technology could be used to wage destructive cyberattacks if installed in company data centers.
Other bidders include Toshiba’s South Korean rival SK Hynix Inc., U.S. investment fund KKR & Co., Taiwan Semiconductor Manufacturing Co. and Western Digital Corp. of the United States, which has jointly invested in Toshiba’s Yokkaichi flash memory plant in Japan.
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