Will SK Hynix’s Takeover of Toshiba Memory Be Aborted?

Even though SK Hynix is facing rough sailing in its bid to take over Toshiba’s memory chip business, the Korean chipmaker is not worried. This is because SK Hynix has achieved a big success by preventing Toshiba’s memory chip unit from being taken over by a Chinese company.

According to the semiconductor industry on April 23, a rumor is going around that Toshiba has passed through an acute financial crisis so it may change its mind to sell off its memory business unit.

However, the SK Group is not in a hurry. This is because the SK Group believes that even if this rumor becomes a reality, the group has "nothing to lose."

"Initially, SK Hynix joined the fray while thinking, ‘We have nothing to lose,” said an official in the semiconductor industry. “Unless a Chinese company takes over the memory business unit, it can be a qualified success.” China's promotion of its semiconductor industry takes aim at Korea's memory semiconductor industry.

Samsung Electronics ranked first with a 38.3-percent share of the NAND flash market in the 4th quarter of last year, and Toshiba ranked second with 17.2 percent. Western Digital (16.2 percent), Micron (11.6 percent), and SK Hynix (11.2 percent) came in third, fourth and fifth, respectively.

As the trade war between the G2 (the US and China) escalated, dark clouds have been cast over the sell-off of Toshiba’s memory business. China was scheduled to approve the deal after an antitrust review of the deal by the end of last month, the first deadline of the sell-off, but the trade war between the two countries has delayed China’s pending issues. Among eight countries which have to approve the deal after anti-trust reviews, only China has not yet done that.

In May, Toshiba will be able to exercise the right to shelve the sale agreement, which can abort the deal. “If the deal is not approved by China within the end of May, Toshiba will go back on selling off its memory business unit,” some media in Japan reported. Toshiba decided to sell off its memory business unit because of its financial trouble. However, the situation has changed with a successful capital increase of 600 billion yen last December. Inside Toshiba, an opinion is strengthening against the sell-off of the lucrative business unit.