Impact of Toshiba Sales
According to industry sources, SK Hynix participated in the preliminary bidding for Toshiba’s memory chip unit that was closed on March 29 and is planning to spend more than 10 trillion won in order to acquire at least 50% of its shares. It is said that SK Hynix is partnering with Middle Eastern or Japanese funds with its available funds estimated at four trillion won or so.
Toshiba called for bids in February this year with the amount of shares for sale limited to 19.9%. It removed the limit this time. Not only SK Hynix but also Western Digital, Micron Technology, Hon Hai Group and Tsinghua Unigroup have joined the bidding so far. The selection of a preferred bidder and the completion of the sale are scheduled for June this year and March next year, respectively.
The global semiconductor market is likely to go through a sea change no matter which one of them takes it. Toshiba is currently second only to Samsung Electronics in the NAND flash market and any company can threaten Samsung Electronics by acquiring its memory chip unit. According to market research firm DRAMeXchange, Samsung Electronics posted a share of 37.1% in the market in the fourth quarter of 2016, followed by Toshiba (18.3%), Western Digital (17.7%), Micron Technology (10.6%) and SK Hynix (9.6%).
Still, none of the candidates has enough financial resources to acquire the unit for itself, that is, without the aid of a consortium. In this regard, the Japanese government is working on various options such as a partnership between a Japanese fund and an American company. In view of the lack of financial resources and Toshiba’s huge debt, it might be acquired by a totally unexpected company.
Semiconductor industry experts are pointing out that the acquisition of the business unit by a client such as a smartphone manufacturer or a Chinese company other than those that have been in the industry is likely to lead to market confusion because it can disturb supply chains and the market itself by using its capital. It is being said that the Japanese government will include no Chinese company in the group of candidates.