Following earlier confusion about whether Apple or Foxconn was bidding for a stake in Toshiba’s chip-making division, it appears that the answer could be ‘both.’ Reuters cites a report by public broadcaster NHK that Apple would be making its own bid alongside the existing Foxconn one.
Apple is considering teaming up with its supplier Foxconn to bid for Toshiba’s semiconductor business, public broadcaster NHK said on Friday […] Apple is considering investing at least several billion dollars to take a stake of more than 20 percent.
If the deal went through, it could be bad news for Samsung – but there are a couple of hurdles to be overcome before agreement could be reached …
The obvious rationale for Apple to take a significant stake in the business is to secure supplies of flash storage. After Samsung, Toshiba is the world’s second-largest manufacturer of flash memory, so having control of the company could allow Apple to reduce its dependence on Samsung components.
However, the Foxconn element of the bid could prove problematic, as there are laws controlling the sale of ‘sensitive technology’ to investors the Japanese government considers a risk to national security. The relationship between Japan and China is often strained, and Taiwan’s own status as either an independent state or a part of China is a contentious issue.
NHK’s source says that Apple’s plan would be for Toshiba to retain a partial stake, so that control of the company would be jointly held by Japan and the USA, with Foxconn having only a minority holding.
A second complication is that one of the other bidders – Western Digital – alleges that Toshiba is violating a joint agreement between the two companies by inviting outside bids. Finally, two other players remain in the game: Broadcom and SK Hynix, chipmaking companies from the U.S. and South Korea respectively. It appears that another Apple supplier reported to be bidding, TSMC, has now dropped out.
Apple appears to be attempting to reduce its dependence on outside suppliers as it designs more of its own chips, and having a sweetheart deal with a chip supplier would have obvious appeal.