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Terry Gou, chairman of Hon Hai Precision Industry, better known as Foxconn   © Reuters
Asia300

Foxconn eyes involving Sharp in Toshiba chip unit bidding

Adding Japanese arm to team could ensure smoother negotiations

OSAKA -- Hon Hai Precision Industry, now the parent of Japanese electronics giant Sharp, is considering including the Japanese unit in its bidding team attempting to buy Toshiba's spun-off chipmaking unit, The Nikkei learned Tuesday.

Hon Hai, also known as Foxconn, is believed to have already asked SoftBank Group of Japan and American tech giant Apple to join it in the bidding.

Hon Hai's keenness on Toshiba's chip business has raised concerns that Japanese technology could drain out to China or Taiwan. The Taiwanese iPhone assembler appears to be trying to fend off such concerns by involving the Japanese unit, more than 60% of which is owned by Foxconn, in the bidding, to ensure that negotiations with Toshiba go smoothly.

Hon Hai is believed to have successfully passed the first round of the bidding process with an offer of some 3 trillion yen ($27.5 billion). Toshiba plans to close the second round of bidding in mid-May and select bidders for priority negotiations. Hon Hai has not yet finalized its offer details.

In addition to its signature liquid crystal displays, Sharp is committed to enhancing production of camera parts for smartphones. Acquiring Toshiba's competitive memory chip business, which supplies parts for iPhones, will be an advantage for the Hon Hai group to expand business opportunities.

Toshiba seeks to sell the business for 2 trillion yen or so to fill the hole left in its finances by massive losses in its U.S. nuclear operations.

Participants in the first bidding round also included Western Digital of the U.S. and SK Hynix of South Korea, as well as U.S. chipmaker Broadcom.

U.S. investment funds, such as Silver Lake Partners, were also reported to have submitted bids.

Shares in Sharp ended the day up nearly 6% at 390 yen per share. The shares hit an intraday high of 394 yen shortly after the news broke.

(Nikkei)

Sharp shares updated at 4:30 pm JST

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