Toshiba Attracting More Potential Bidders for Chips Unit

Toshiba’s memory chips business is attracting more potential bidders ahead of an end-March deadline, including Japanese government-backed entities, according to Bloomberg citing people with knowledge of the matter.

The Development Bank of Japan is considering a joint offer with U.S. financial bidders. The electronics conglomerate is seeking a sale of the prized unit to make up for a multibillion-dollar writedown in its nuclear operations. The semiconductor business is Toshiba’s crown jewel and makes the memory chips that go into personal computers, smartphones and data centers. It accounted for about 25 percent of Toshiba’s 5.67 trillion yen in revenue during the latest fiscal year.

Toshiba executive said last week he would welcome a bid from Innovation Network Corp. of Japan. INCJ and DBJ are considering a joint bid to take more than a 30 percent stake, the Yomiuri newspaper reported, but Chief Cabinet Secretary Yoshihide Suga immediately poured cold water on the speculations, telling reporters in Tokyo that Japan is not considering the use of public funds for Toshiba. Kaori Hiraki, a spokeswoman for Toshiba, declined to comment on the progress of chip unit sale and possible bidders. Representatives for DBJ and INCJ declined to comment.

The number of interested parties, which already include semiconductor makers and investments funds, may increase beyond the current 10 and the company expects final bids by March 29, the executive said. Western Digital, SK Hynix, Foxconn, Micron and Kingston are among those interested, one of the people said. On March 2, Foxconn founder Terry Gou said he is “very serious“ about making a bid for the memory chip business. Representatives for Kingston, Western Digital and Micron declined to comment. Foxconn’s public relations department didn’t immediately respond to requests for comment.

The bids could range from 700 billion yen to 1.8 trillion yen ($6.2 billion-$15.9 billion), one of the persons said. Toshiba, which is willing to sell off a majority stake in the unit, is seeking bids that value the entire business at 1.5 trillion yen. Toshiba has said it aims to complete the sale of the chips business by March 2018. Its three main lenders have agreed to extend support to the company in the meantime.