April 26, 2024

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[THE INVESTOR] SK hynix has reportedly submitted a new bid to acquire stake in Toshiba’s chip business in a consortium with foreign financial investors, including those from Japan, industry sources said on March 29.

Multiple bidders are eyeing the Japanese chipmaker’s lucrative NAND business, raising the deal price to some 2 trillion yen (US$18 billion). The bidders were asked to submit offers by the 12 p.m. deadline on March 29. 

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Sources say the Korea-Japan alliance is aimed at appeasing the Japanese government’s concerns over tech leaks to rivals.

SK hynix, the world’s second-largest DRAM chipmaker, is beefing up efforts to secure a firm footing in NAND chips that are increasingly used for long-term data storage for big data and Internet of Things services. The company is the fifth-largest player in terms of NAND sales with less than 10 percent market share.

Toshiba, the world’s second-largest NAND chipmaker after Samsung Electronics, suffered more than 7 trillion yen losses in its nuclear power business. To offset the losses, the firm plans to spin off the chip-making unit and sell a sizeable stake -- or all -- to potential bidders.

Taiwan’s Hon Hai Group and TSMC, in particular, are making a big push for the purchase, but industry watchers point out SK hynix and US bidders such as Western Digital and Micron as more potent bidders considering Japan’s reluctance to hand over crucial tech know-how to fast-growing Chinese rivals.

“Chinese chipmakers are pouring resources into NAND chips. If they acquire a stake in Toshiba, that would pose a direct threat to SK hynix,” said Kim Kyung-min, analyst at Daishin Securities.

Sources say SK hynix is still gauging the benefits of the high-priced Toshiba deal. The firm is expected to make its investment decision after a thorough inspection of the business operations. 

In 2012, the firm submitted its bid to acquire Japan’s Elpida Memory but dropped out citing profitability. 

SK Telecom CEO Park Jung-ho who played a key role when SK Group acquired then Hynix in 2011 is said to be leading the Toshiba purchase currently. The preferred bidder is expected to be named in June.

By Lee Ji-yoon (jylee@heraldcorp.com)