Apple mulls ¥50 billion investment in Toshiba chip unit


Apple Inc. is considering joining a Western Digital Corp. bid for Toshiba Corp.’s chip unit and investing around ¥50 billion ($460 million), sources close to the matter said Friday.

Western Digital, Toshiba’s chip venture partner, has approached Apple because the U.S. data storage company plans to refrain from making an initial investment in Toshiba Memory Corp. in order to speed up antitrust reviews should its bid succeed. It will also demand an expanded role in the chip plant it jointly runs with Toshiba.

Flash memory chips are a key component of smartphones. Apple’s share of control in Toshiba Memory is still being discussed by the consortium members to avoid antitrust issues, the sources said.

The Western Digital consortium eyes listing Toshiba Memory in the future and the U.S. company is planning to take a little less than 16 percent of the voting rights when the unit goes public, sources have said.

The core members of the Western Digital group, which includes the state-backed Innovation Network Corp. of Japan, the Development Bank of Japan and U.S. investment fund Kohlberg Kravis Roberts & Co., have offered ¥1.9 trillion to ¥2 trillion for Toshiba Memory.

Western Digital initially offered to buy ¥150 billion of Toshiba Memory’s convertible bonds, sources close to the negotiations have said.

Western Digital and Toshiba have been trying to find common ground in their negotiations over Toshiba Memory after a bitter feud broke out over whether the Japanese company needs its U.S. partner’s consent to sell it.

Toshiba remains in talks with two other consortia — a Japan-U.S.-South Korean group and another group organized by Taiwanese tech giant Hon Hai Precision Industry Co., also known as Foxconn.

Apple has been approached by all three of the consortia bidding for Toshiba Memory.

The INCJ and DBJ are also part of the Japan-U.S.-South Korean group that includes U.S. investment fund Bain Capital and South Korean chipmaker SK Hynix Inc.

Toshiba is aiming to pick a buyer on Wednesday, when it will hold a board meeting and report the results at an extraordinary shareholders meeting scheduled for Oct. 24.

Toshiba needs to quickly sell the chip business to cover huge losses stemming from its now-bankrupt former U.S. nuclear unit Westinghouse Electric Co. The electronics giant will be delisted from the Tokyo Stock Exchange unless it eliminates its negative net worth by next March.

Toshiba is running out of time as it would typically take more than six months to receive clearance for the chip unit deal from regulators in major countries.

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