Tosh Speculation Goes Feverish

Speculation around the sale of Toshiba’s chip business is getting a trifle fevered. The first round of bidding has produced some surprises.

Broadcom and Silverlake are said to have put in a joint bid of  $18 billion.

Now, Apple is said to be bidding. Back in 2008 Apple paid $278 million for Palo Alto Semiconductor to help it design its processors. Adding  a memory company would give it total control of its most important hardware technologies.

Apple uses huge amounts of NAND – at one time said to be as much as a quarter of the world’s NAND supply.

Apple may not want to be dependent on Samsung, Micron and Hynix for it and it may be worried about someone getting control of Toshiba who would not give Apple such good terms as it has been getting.

Having control over its supply of NAND must seem attractive to Apple.

What is weirder is that Google and Amazon are said to be bidding for Toshiba. What on earth they want it for is anyone’s gues. Neither has a massive need for NAND as far as I know, so maybe it’s simply the lure of owning a high quality semiconductor operation that attracts them.

Tsinghua has firmly stated it is not bidding and has even gone to the trouble of issuing a statement to deny that it has put in a bid, stating: “Tsinghua Unigroup never participated in the bid and related matters.”

Tsinghua would, of course, love to buy Toshiba, and it has just had a $22 billion cash lob-out from the China government so it can easily afford to buy it, but the assumption is that the Japanese trade authorities wouldn’t approve a sale to Tsinghua and, after being rebuffed in so many bids by regulatory authorities, Tsinghua doesn’t fancy another rejection.

TSMC is said to be an interested, and certainly very interesting, possible bidder. The only reason why a foundry, committed to not competing with its customers, would want to buy Toshiba is, presumably, to get access to Toshiba’s 3D NAND technology.

TSMC would have to pay a pretty price for it and may prefer to buy a slice, but not total ownership, of Toshiba – if the Toshiba sale is still contemplating sales of shares. At one time Toshiba was only selling 20% of the business, and was looking for $3.6 billion for it

Then there are the long-time  lurkers: Micron, Hynix (possibly backed by Japanese finance), Western Digital, Foxconn and Bain.

And then, finally, there’s the possibility that the Japanese government will take control of the company via its bail-out agencies the Development Bank of Japan and the public-private Innovation Network Corporation of Japan

At one time Toshiba put a $13 billion price rage on the business so bids of around $18 billion represent an unexpected bonanza.

Now Toshiba has to  talk to all the bidders to establish their intentions before proceeding to a second round of bidding.

It will leave a lot of change after the $9 billion charge  for the Westinghouse bankruptcy  has been taken.


Comments

2 comments

  1. Well SEPAM, memory used to be a commodity but now, with only four companies making NAND and three making DRAM, maybe it’s becoming a specialty skill which only a special few possess, and so worth possessing.

  2. SecretEuroPatentAgentMan

    Google designs processors and routing chips, could that be the cause for the interest?

    Of course Imagination will probably be cheap quote soon now that Apple has made it clear they will not need their GPU technology.

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