Toshiba Memory Business Stake Now Has SK Hynix Bidding Too

Toshiba Memory Business Stake Now Has SK Hynix Bidding Too

Due to the booming NAND market opportunity, even SK Hynix Inc. of South Korea is trying to run for stake in the memory chip business of Toshiba Corporation. The source, who pointed this out, said that the second largest memory chip maker had been successful in submitting a bid, but the amount of stakes that the company would get is yet to be decided.

Both Toshiba and SK Hynix declined to comment on the bidding process specifics. Analysts commented that with this SK Hynix could boost chip supply by benefitting from the technological knowhow of Toshiba in the NAND products. When long term data storage NAND memory chips are concerned, this Japanese firm comes to the mind.

 

Many other NAND makers like the Western Digital Corp, a California-based data storage company have also submitted their bids as there is a surge in the chip prices now. With the demand for smartphones increasing and the technology in them like the processing power increasing, the suppliers of the chip are really struggling to keep up with the demand. Expectations of Nomura for the global memory sales is that they would grow about 56.7 percent by the end of this year to about 116 billion dollars and NAND segment is expected to expand 51.2 percent to 51 billion dollars.

Toshiba’s memory business will rise by about 1.7 Billion Dollars, but by only offering less than 20 percent stake of this business. There is also a speculation that this sale is just a part of a planned sell-off to cover for the write-downs in its nuclear power unit in US.

With a record revenue in the latest quarter October-December, SK Hynix has now become the second largest firm right behind Samsung by market capitalization.

SK Hynix has also announced about 1.94 Billion dollar investment to set up a new NAND plant. This decision was with the hopes of catching up with their rivals using advanced technologies for production. The memory industry is ruled by firms like SK Hynix, Toshiba and Samsung, but still SK Hynix’s market share is not high enough as to trigger the antitrust concerns according to an analyst at Daishin Securities.

There was an unsuccessful attempt by Tshinghua Unigroup Ltd, a top chip manufacturer in the state to acquire the US-based Micron Technology in 2015. They have now unveiled that they would build a $30 billion factory for memory chip.

Kim also said that if this deal becomes successful the other memory makers would be at a grave risk. Shares of Toshiba were down by 0.7 percent and SK Hynix’s share were up by 0.6 percent in the trade early Tuesday. Let’s hope this move benefits both firms.

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