Apple teaming up with Foxconn for Toshiba’s chip unit

Apple’s allays national security concerns of Japan and the U.S. despite its teaming up with Foxconn.

In the latest development in the saga of Toshiba’s chip unit sale, Japanese new agency NHK has reported that Apple Inc is considering teaming up with Foxconn, its supplier, to bid for Toshiba’s chip manufacturing unit.

NHK has reported that Apple is considering sinking in at least $7 billion and is eyeing a stake of more than 20%.

It is to be seen how this Apple’s strategy will fit in the larger strategy of keeping China out of the deal. Apple’s strategy includes a plan wherein Toshiba will maintain a partial stake so that the business will remain in Japanese and U.S. control, reported NHK citing an unidentified source.

The proposal could make sense for Japan since it allays its concerns over the Chinese getting their hands over sensitive technology which both countries see as a risk to their respective national security.

While Apple was not immediate available for comment, Taiwan’s Foxconn which has deep ties with the Chinese state, declined to comment.

The development comes in the wake of Western Digital Corp warning Toshiba, its Japanese partner, that it is violating its joint venture contract if it were to sell its chipmaking unit. WDC has urged it to enter into excusive negotiating rights.

According to sources familiar with the matter at hand, Toshiba has narrowed down the field of bidders to four suitors: U.S. chip manufacturer Broadcom Ltd, which has partnered with private equity firm Silver Lake Partners LP, SK Hynix of South Korea and Foxconn, also known as Hon Hai Precision Industry, and Western Digital Corp.

($1 = 109.1300 yen)

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