TOKYO -- Toshiba is planning to sell a minority stake in its memory chip business to more than one company in an attempt to limit the leverage the new stakeholders will have over the technology group's core operation.
The Japanese company is planning to spin off the memory unit and sell a 19.9% stake to outside investors. U.S. semiconductor maker Micron Technology, South Korean peer SK Hynix and Toshiba's American partner Western Digital have all submitted bids.
A bid also came in from Hon Hai Precision Industry, the Taiwanese iPhone assembler commonly known as Foxconn. Toshiba is in talks with about five camps, including American private equity fund Bain Capital.
However, finding buyers likely won't be so easy. More than a few insiders at companies looking at Toshiba's offer describe the investment opportunity as lacking in appeal. After all, the companies sharing the small stake would find themselves with only a minor say over business decisions.
Toshiba transferred the entire ownership of its medical device subsidiary to Canon last year. But this time, the company is highly protective of its memory business, which is positioned as a core operation.
Micron, Hynix and Western Digital are at a disadvantage because "antitrust screenings in respective countries will likely take time," said a Toshiba executive.
Toshiba is due to announce the extent of the hefty losses at its U.S. nuclear business on Tuesday. The group is scrambling to sell shares in the new chip spin-off in order to avoid falling into negative net worth the end of March.
At the memory plant in Yokkaichi, a city near Nagoya, Toshiba started building its sixth fabrication building on Thursday. The fact that the memory business is the most important segment in the group "remains unchanged," Yasuo Naruke, a senior executive vice president, said during the groundbreaking ceremony. "We will continue to prevail in memory chips and lead the market," he added.
The sixth fab will be dedicated to making 3-D memory chips and will begin operating in stages starting in summer 2018. Toshiba is also pouring 860 billion yen ($7.6 billion) into research and development and memory capital expenditures during the three years to fiscal 2018, with no plans to reduce the amount, according to an executive.