SK hynix bids for stake in Toshiba's chip biz

The Korea Times

The Korea Times

Business

Sat, September 23, 2023 | 21:26

Tech

SK hynix bids for stake in Toshiba's chip biz

Posted : 2017-02-07 17:20

Updated : 2017-02-07 19:23

By Kang Seung-woo

SK hynix is seeking to acquire a stake in the flash-memory business of Toshiba to boost its production of NAND flash chips used in smartphones.

The world's second-largest memory chipmaker said Tuesday that it had submitted an initial bid, last week, to buy a 20 percent stake in the Japanese firm's well-performing unit, worth 3 trillion won ($2.62 billion).

"We presented a non-binding proposal to Toshiba. We have yet to make the final bid, though. We will come up with a new filing in a month if we make a final decision on the issue," the firm said in a regulatory filing.

The bidding came as SK Group, the nation's third-largest conglomerate, has made aggressive efforts to expand its presence in the semiconductor industry.

Late last month, the world's No. 2 NAND flash memory producer announced that it plans to spin off its NAND flash business, including its solid state drive operations, and sell a stake of around 20 percent in the business in order to offset ballooning losses from its nuclear energy operation in the United States.

The solid state drive is an advanced storage device for which the business outlook is bright.

DRAMs are used widely in personal computers, while NAND flash memory chips are mainly used in smartphones and other mobile devices.

SK hynix is the world's second-largest DRAM supplier after Samsung Electronics, but it is a distant fourth in terms of market share for NAND behind Samsung, Toshiba and the U.S.'s Western Digital.

Market observers expect SK's acquisition of the Toshiba stake to establish the company as a competitive NAND chip maker.

"If SK hynix pulls off the deal, it will provide good momentum for the company to improve its competitiveness in the NAND flash business," said a market analyst.

Toshiba's current NAND partner Western Digital and Tsinghua Unigroup, China's top state chip manufacturer, are regarded as SK hynix's potential rivals to pick up the 20 percent stake.

Setting the chip-making industry as a future growth engine, SK Group has aggressively made investments in the semiconductor segment.

Last month, SK holdings, the holding company of SK Group, announced a plan to buy a controlling stake in silicon wafer manufacturer LG Siltron for 620 billion won ($531 million). Silicon wafers are key components for semiconductor production.

Ahead of the Siltron deal, the group also bought OCI Materials, a local manufacturer of special gases used in making chips, LCDs and solar panels in 2015, while taking over SK Airgas, an industrial gas manufacturer, last year.

In addition, SK hynix is reportedly considering a joint venture with U.S.-based data storage company Seagate as part of its plan to bolster its presence in the NAND market.

ksw@ktimes.com