Apple may partner with Foxconn for stake bid in Toshiba's chip unit

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Apple may partner with Foxconn for stake bid in Toshiba's chip unit

Until a week ago, the U.S. companies, Western Digital and Silver Lake Partners, were the strongest candidates because the Japanese government and Toshiba did not want to sell its chip unit to Chinese companies in fear of a technology leak. With news of these developments coming through, the Japanese government has expressed their concerns about the transfer of sensitive technology, which might pose a risk to national security. The bulk of Apple's iPhones are manufactured at Foxconn's extensive manufacturing base there.

Apple's entry into the auction may improve Toshiba's prospects for emerging from a fiasco in its Westinghouse nuclear business that has led to billions of dollars in losses. Apple is considering a range of options from partnering with Taiwan's Hon Hai Precision Industry Co.to joining with Japanese investors on a bid, said the people, asking not to be named because the matter is private.

The American firm is supposedly collaborating with its supplier Foxconn and is "willing to spend billions of dollars" in order to acquire a "substantial stake" with Toshiba in the Japanese firm's semiconductor business. They have a deal to give the US company exclusive negotiating rights to overtake any of Toshiba's business.

Toshiba has put its semiconductor unit on the market and Apple is said to be considering a bid, according to Bloomberg.

"Its financial problems were a major drag on the growth of its memory business", Sean Yang, research director of DRAMeXchange, said in an earlier interview.

Foxxconn participated in the first round of the bidding process for Toshiba's chip business.

Some small lenders have baulked at the offer as they have been offered other Toshiba assets as collateral, such as its group companies' shares and real estate.

Meanwhile, Toshiba's joint-venture partner Western Digital has also made a bid for the business and warned that the sale would be a breach of the pair's contract unless it is offered exclusive negotiation rights ahead of rival bids. Get twice-daily updates on what the St. Louis business community is talking about.

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