With demand for memory chips outstripping supply, SK Hynix could significantly benefit if it wins its bid.
As per a source familiar with the matter at hand, South Korea’s SK Hynix Inc, is vying for a stake in Toshiba Corp’s memory chip business, since it could provide a much needed leeway to gain on its rivals in the booming NAND market.
SK Hynix Inc, currently the world’s second biggest memory chip manufacturer has submitted an initial bid for the stake. However it has yet to decide on the size of its stake.
The source has requested anonymity since the person was not authorised to speak publicly on the deal.
When asked to respond to requests for comments, SK Hynix’s spokesman declined comment while Toshiba said it could not comment on the specifics of the bidding process since it is an ongoing matter.
According to analysts, SK Hynix would gain substantially Toshiba’s know-how in the manufacturing of high-end NAND chips which could boost its chip supply.
Others companies in the fray include California-based Western Digital Corp, other private equity funds and NAND manufacturers, all of whom have submitted their own bids, midst a surge in memory chip prices.
With rising demand for more firepower from data servers and smartphones, chip suppliers are struggling to fulfil the surge in demand.
According to Nomura’s estimates, global memory sales are set to grow by 56.7% to $116 billion this year. The NAND segment is set to grow by 51.2% to $51 billion.
Sources have disclosed that Toshiba could rake in $1.7 billion (200 billion yen) by selling a 20% stake in its memory business. This divestiture is part of its broad strategic sell-off which is designed to offset its multi-billion dollar write-offs of its U.S. nuclear power unit.