Shares of Toshiba were partially buoyed this morning following a report that Apple is considering taking a major stake in the Japanese company’s semiconductor business.
Japanese public broadcaster NHK reported that Apple may team up with longtime partner Foxconn to invest “at least several billion dollars” in exchange for more than 20% of the semiconductor unit. Reuters, which picked up on the news, reported that Toshiba would retain a partial stake to ensure that the business remains under U.S. and Japanese control, addressing concerns regarding national security from Japanese regulators.
Bloomberg also ran with the story, reporting that Toshiba’s memory chip business is on the market in an effort to offset a $6.56 billion writedown at Westinghouse, the company’s nuclear equipment business in the U.S. Toshiba shares sank more than 8% this morning before rebounding somewhat on the Apple news; they were trading down less than 5% by noon Friday.
Foxconn remains the world’s largest manufacturer of the iPhone, and reports earlier this week indicated that the Taiwanese company was willing to pay $27 billion for Toshiba’s semiconductor unit. Toshiba is a major worldwide player in flash memory chips, second only to Samsung.
Foxconn is reported to be one of four companies vying for at least part of Toshiba’s chip business; others are Broadcom, SK Hynix, and Western Digital, Reuters said. Apple has yet to play a role in any of those bids.
An investment with Foxconn would mark Apple’s first direct stake in a significant memory chip company, Reuters said, and would help solidify a key element of the supply chain that has become a hallmark for the iPhone vendor.