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Foxconn Chairman Terry Gou speaks at his office in mid-June. (Photo by Debby Wu)

Foxconn's Terry Gou still wants Toshiba's memory unit

Taiwanese tycoon says he will lose interest without a deal in six months

NEW TAIPEI CITY, Taiwan -- Chairman Terry Gou of key iPhone assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, told the Nikkei Asian Review on Saturday that he was still keen to acquire the memory chip business of embattled Japanese conglomerate Toshiba, but warned he would withdraw his offer if the bidding process dragged on for too long.

"I am offering to help [Toshiba]," Gou told the Nikkei Asian Review in an exclusive interview at his family graveyard in the Taipei suburbs. He was there to pay his respects to a deceased family member.

"But if they continue to exclude me, then I will no longer want to acquire [Toshiba's memory business] after six months, because by then its technology will be falling behind others."

Toshiba supplies memory chips for iPhones, although it lags behind Samsung Electronics in global market share.

Gou's comments came amid growing confusion around Toshiba's plans to sell its memory chip business, the only profitable unit of the company, to make up for substantial losses at its United States nuclear unit Westinghouse.

Foxconn is the highest bidder, offering more than 2 trillion yen ($17.8 billion). Gou has told the Nikkei Asian Review that his company's bid has the support of Apple and Amazon, two major Foxconn customers.

Japanese officials have been trying to prevent the Taiwanese manufacturing powerhouse, which manufacturers iPhones in China, from winning the Toshiba unit out of fear that Toshiba's advanced memory technology could be leaked.

Toshiba has tentatively picked a Japanese government-led consortium as its preferred suitor. The group consists of the Innovation Network Corporation of Japan and Development Bank of Japan, along with the U.S. investment firm Bain Capital.

Yet talks between Toshiba and the consortium are making little progress. Both sides indicated over the past week that it was unclear when they would be able to reach a deal, after U.S. chipmaker Western Digital attempted to block the sale through a court injunction.

Western Digital is arguing in a California court that any transfer of ownership of Toshiba's memory operations without its consent would violate joint venture agreements. Toshiba has lodged a counterclaim against Western Digital in Tokyo.

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