Electronic Products & Technology

Taiwan’s Foxconn ‘bidding’ for Toshiba chip biz

By Sijia Jiang, Reuters Hong Kong   

Electronics Production / Materials Semiconductors Contract Manufacturing Engineering Supply Chain

The world’s largest contract electronics maker, Taiwan-based Foxconn, is “definitely bidding” for the chip business of Japan’s Toshiba Corp and is “very confident” it can buy into it, company founder Terry Gou told Reuters this week. Gou was speaking as Foxconn, formally known as Hon Hai Precision Industry Co Ltd, broke ground for a 61 billion yuan ($8.87 billion) flat-screen display factory in Guangzhou province, southern China.

Toshiba is considering selling the majority – or all – of its marquee flash-memory chip business, as it seeks to make up for a $6.3 billion writedown from its nuclear operations. Gou declined to say how much of the Japanese company’s chip business Foxconn was interested in.

“I cannot say we are for sure getting it, but we are very confident. We are also very sincere,” Gou said. He later told Reuters that Foxconn was “definitely bidding” for Toshiba. “Money should not be the only thing (for Toshiba) to consider… We can help its technology to be sold in products all over the world. That is Foxconn’s advantage.”

Selling most of its flash memory chip business


Gou said Foxconn was open to teaming up with partners on any bid for Toshiba’s chip business, adding anything was possible. Toshiba wants to raise at least 1 trillion yen ($8.8 billion) in part by selling most of its flash memory chip business, seeking to create a buffer for any fresh financial problems, a person with knowledge of the matter previously told Reuters. Another person with knowledge of the matter has told Reuters that Toshiba would seek initial bids in March, and aims to choose a preferred bidder or bidders by the end of May. Gou on Wednesday said Foxconn, which last year bought control of Japan’s Sharp Corp. was not a chip maker and so its bid is unlikely to be subject to anti-monopoly issues.

“Because we have the experience with Sharp, we think if Toshiba goes to us, we are its client, its user,” Gou said. “We would even invite it to set up a factory in China. It can keep its core technology in Japan but it is about expanding capacity.”

Foxconn is one of China’s biggest employers and an assembler of Apple Inc. iPhones. Toshiba is the second-biggest NAND chip producer after South Korea’s Samsung Electronics Co Ltd. Speaking about Foxconn’s investment plans, Gou said priority markets were China and the United States. He also said it was important the U.S. did not engage in a trade war with China.

Taiwan’s tech-dominated manufacturers have been unnerved by U.S. President Donald Trump’s suggestion to raise tariffs on imports from some countries, notably China, where the Taiwanese own factories. In January, Gou said Foxconn was considering investing over $7 billion to set up a display factory with Sharp in the U.S. Construction would start in the first half of this year with Sharp taking the lead on the project, a person with knowledge of the plan previously told Reuters.


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