Toshiba unlikely to sell semiconductor unit to Chinese or Taiwanese companies

Toshiba unlikely to sell semiconductor unit to Chinese or Taiwanese companies. March. 24, 2017 07:22. by Won-Jae Jang peacechaos@donga.com.

The Japanese government is reportedly considering Toshiba Corp. not to sell its semiconductor business to a Chinese or Taiwanese company for national security. Korea’s SK Hynix has been seeking to acquire the business unit.

The Japanese Asahi Shimbun newspaper said on Thursday that the Ministry of Economy, Trade and Industry considers urging the company to suspend the sale or ordering the sale to be stopped if it is sold to a Chinese company, arguing that Toshiba’s NAND-type flash memories are widely used in the data centers of Japanese companies and government organizations. The ministry is also concerns about Taiwanese companies which operate main factories in China like Hon Hai Precision Industry.

If the government judges the sale of the business could damage Japan’s security or public order, it can intervene in the sale. The ministry is also considering a plan that if Toshiba sells its semiconductor business to a U.S. or Korean firm, the ministry will require Toshiba to attach a condition that prohibits it from selling the semiconductor business to another Taiwanese or Chinese company in the future. The newspaper said, “The Japanese government is also considering having its two affiliated organizations buy shares in a new company Toshiba plans to set up by splitting off its semiconductor business. The two are the Innovation Network Corp. of Japan, a fund jointly operated by firms in the public and private sectors, and the Development Bank of Japan Inc.”

About 10 companies are showing interest in buying Toshiba’s semiconductor business. They include SK Hynix Inc. of South Korea, Hon Hai Precision Industry, Western Digital Corp. of the United States, Taiwan Semiconductor Manufacturing Co. and Tsinghua Unigroup Ltd. of China.