Hon Hai Precision Industry Co (鴻海精密) and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday declined to comment on a report that the two Taiwanese high-tech giants will jointly bid for the memorychip assets of Japan’s Toshiba Corp.
Hon Hai and TSMC, which are the largest contract electronics maker and the largest contract chip maker in the world respectively, said they do not respond to market speculations.
The speculations arose after the Liberty Times (the Taipei Times’ sister newspaper) reported that Hon Hai and TSMC had formed an alliance to procure Toshiba’s memorychip assets.
The report said that the two companies are expected to submit a bid by March 29.
The report also cited unnamed sources close to the deal as saying that Hon Hai and TSMC have signed a nondisclosure agreement on the bid, the proceeds from which the Japanese firm plans to use to offset the effects of losses caused by its nuclear energy business in the US market.
A Toshiba board meeting last month approved a proposal to spin off its semiconductor operations, which operate under the name Toshiba Memory.
The plan to sell a stake in Toshiba Memory has attracted keen interest from potential suitors in Taiwan, the US and South Korea, the report said.
Possible buyers in Taiwan include Hon Hai and TSMC, the Liberty Times report added.
Last week, Hon Hai chairman Terry Gou (郭台銘) said that his company is keen to acquire a stake in Toshiba Memory and that the firm would be able to work with Toshiba to grow its memory operations.
Gou said he would invite Toshiba Memory, which specializes in NAND flash chip production, to establish a production base in China.
Separately, TSMC chairman Morris Chang (張忠謀) told reporters that his company was closely watching the terms attached to the deal.
It had previously been reported that Toshiba would sell a 19.9 percent stake, but more recent Japanese media reports have suggested Toshiba could sell Toshiba Memory outright.
The Korea Herald at the weekend said South Korea-based DRAM maker SK Hynix Inc is likely to work with Hon Hai on the Toshiba Memory bid, as Hynix requires more cash assets to make the acquisition.
The Korea Herald estimated that the disposal of 100 percent of Toshiba Memory could cost about US$8.7 billion, but SK Hynix only has about US$3.4 billion in cash assets, so it could seek the assistance of Hon Hai.
South Korean media said Hon Hai has close business ties with SK Group, which owns SK Hynix, with roughly a 3.5 percent stake in the conglomerate.
Toshiba is the second-largest NAND flash memorychip supplier in the world, trailing only South Korea’s Samsung Electronics Co.
NAND flash is used for storage functions and can be installed in smartphones.
Hon Hai, which acquired a 66 percent stake in Japan’s Sharp Corp for US$3.5 billion in August last year, is believed to want to expand beyond contract manufacturing into the semiconductor business.
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