Thu, Mar 02, 2017 - Page 12 News List

Foxconn eyes Toshiba’s chip business

ADVANTAGES OF SCALE:Terry Gou did not say if Foxconn has officially submitted a bid, but added that ‘money should not be the only thing [for Toshiba] to consider’

By Lauly Li  /  Staff reporter

Foxconn Technology Group (富士康), the world’s largest contract electronics manufacturer, yesterday acknowledged that it intends to buy Toshiba Corp’s loss-making chip business.

Foxconn chairman Terry Gou (郭台銘) announced the plan during a groudbreaking ceremony for a factory in China.

“We have the experience of [buying] Sharp Corp. We are sincere and confident about [investing in] Toshiba,” Gou told a media briefing after the ceremony at Sakai Display Production Corp’s (SDP) 10.5-generation display factory in Guangzhou, China.

The briefing was live-streamed on the Internet.

It was the first time Gou publicly confirmed the company’s interests in purchasing Toshiba’s memorychip business, after the Japanese firm last month said it plans to sell stakes in its memorychip unit and other businesses, in a bid to alleviate its financial troubles.

After South Korea’s Samsung Electronics Co, Toshiba is the second-largest NAND flash memory chip manufacturer in the world.

The Japanese firm is reportedly to send letters soliciting offers for the memorychip business this week and is seeking bids valued at ¥1.5 trillion (US$13.19 billion), Bloomberg reported yesterday, citing people familiar with the matter.

Potential bidders include Foxconn, South Korea’s SK Hynix Inc, Micron Technology Inc and Western Digital Corp, the report said.

Gou said Foxconn is a client and a partner of Toshiba’s.

The company is going to need more flash memory and solid-state- drive capacity from Toshiba to store its daily manufacturing data, he said.

Foxconn is developing ultra-high-resolution 8K technology, necessitating a massive amount of memory.

“We need the memory products. We need Toshiba,” Gou said.

Gou did not say if Foxconn has officially submitted a bid or how many of Toshiba’s businesses it is willing to buy, however he said: “Money should not be the only thing [for Toshiba] to consider.”

Foxconn can leverage its advantages to financially support Toshiba, assist the firm in its operations and offer resources to help sell its products all over the world, he said.

Since Foxconn is not a chipmaker, monopoly issues would not pose a problem for regulators, Gou said.

Foxconn’s cash and cash equivalents totaled NT$653.09 billion (US$21.23 billion) as of September last year, according to a company filing with the Taiwan Stock Exchange.

The company has not yet released its financial statements for the final quarter of last year.

In related news, SDP, in which Gou holds a more than 50 percent stake, is expected to launch operations at its new 10.5-generation display factory in Guangzhou in 2019 to produce 8K displays and 8K solutions at the earliest, SDP said in a news release.

It has only been 60 days since Gou, on behalf of SDP, struck a 61 billion yuan (US$8.87 billion) investment deal with the Guangzhou City Government on Dec. 30 last year.

The industrial park would be a strategic base for SDP to develop displays, smart TVs and electronics whiteboards, SDP’s statement said.

SDP said the plant is to produce 90,000 display panels per month and the industrial park could generate an annual production value of 92 billion yuan when fully operational.

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