Apple May Buy Toshiba Chip Business

The logo of Toshiba Corp is seen behind cherry blossoms at the company's headquarters in Tokyo Japan

Thomson Reuters

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.

Apple was not immediate available to comment. The bulk of Apple's iPhones are made at Foxconn's extensive manufacturing base there. Toshiba is a major worldwide player in flash memory chips, second only to Samsung. Western Digital wants to be given exclusive negotiating rights.

The biggest culprit: The bankruptcy filing of its US nuclear unit, Westinghouse Electric, last month after delays and billions of dollars in cost over-runs in building USA reactors. Apple has yet to play a role in any of those bids. It's unclear whether Apple participated in the first round of the auction, which sources have said drew around 10 offers.

Toshiba, based in Tokyo, is selling a majority stake in its vaunted computer-chip business to stem a river of red ink.

Toshiba made a decision to put its profitable... It is thought Toshiba would retain a stake.

Shares in Toshiba slid as much as 8% Friday.

Toshiba is battling to survive in the face of £4.2bn losses, the bankruptcy of its nuclear business Westinghouse and a crisis of investor confidence.

"We would be running risks of being sued by our shareholders if we provide loans to Toshiba without collateral", the executive said.

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