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June 12, 2017

Amazon close to joining Foxconn bid for Toshiba chip business – report

Apple and Dell have already joined the Foxconn-led consortium chasing the prize that is Toshiba's chip business.

By Ellie Burns

Two giants of tech are set to join a Foxconn-led consortium bidding for the lucrative Toshiba chip business – with a third set to join imminently.

Speaking with Reuters, Foxconn founder and CEO Terry Gou said that Apple and Dell will be joining Foxconn as it chases the highly prized chip unit.

Gou also said that was close to joining the consortium, while discussions with Google, Microsoft and Cisco were on-going.

Although the Foxconn chief declined to state the size of the offer or say how much the US tech giants planned to invest, he did say that “Apple was in for sure” and that the iPhone maker’s participation in the bidding had already been approved by CEO Tim Cook and Apple’s board of directors.

Toshiba, the world’s second-largest producer of NAND chips, is looking to sell its chip business to cover billions of dollars in cost overruns at its now-bankrupt US nuclear business Westinghouse Electric. The Japanese giant has put a $18 billion value on its chip business.

READ MORE: Toshiba chairman steps down amid nuclear losses

The Foxconn-led consortium goes up against Western Digital, with the US chipmaker reportedly set to raise its offer in order to sign the deal. Western Digital, which is also part of a consortium led by a Japanese government-backed fund, is reported to be on the cusp of presenting a new offer of $18 billion +.

Western Digital has been seen as the front runner in the billion-dollar deal, in part because Foxconn has deep ties with China where it manufacturers most of its products. Previously, the Japanese government has said that it will block any deal which will result in chip technology being taken out of the country.

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Another potential bidder is Broadcom, another US chipmaker which has partnered with American private equity firm Silver Lake to offer 2.2 trillion yen, according to sources cited by Resuters.

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