Toshiba Hasn't Revealed That SK Hynix Could Get Stake in Its Chip Business
2017年7月3日 - 01:05PM
Dow Jones News
By Takashi Mochizuki and Kosaku Narioka in Tokyo and Eun-Young Jeong in Seoul
A plan for the sale of Toshiba Corp.'s semiconductor unit
includes an option for SK Hynix Inc. to eventually take a minority
stake in the business, people involved in the proposed deal say,
contradicting Toshiba's public statements.
SK Hynix's potential partial ownership of Toshiba's chip
business could escalate opposition from Western Digital Corp.,
which currently has a stake in Toshiba's semiconductor operations
and competes with SK Hynix, a South Korean chip maker. Western
Digital, based in San Jose, Calif., has filed lawsuits to try to
block the sale.
The arrangement would also appear to run counter to concerns
raised by Japanese government officials about the potential leakage
of sensitive technology to foreign competitors.
Toshiba says it is nearing an agreement with a consortium led by
state-backed fund Innovation Network Corp. of Japan, to sell its
crown jewel semiconductor business, which makes NAND flash memory
chips, for about $18 billion.
INCJ and 100% government-owned Development Bank of Japan plan to
acquire 66% of the unit, while the rest would go to U.S.
private-equity firm Bain Capital, according to the people involved
in the deal.
Contracts between Bain and SK Hynix will allow SK Hynix to
acquire some or all of the stake initially held by Bain at a later
date, these people say.
SK Hynix's name isn't included in Toshiba's public documents
about the consortium but it has been described by Toshiba Chief
Executive Satoshi Tsunakawa as only providing financing for the
deal.
"There won't be any technology leaks because SK Hynix won't take
any voting rights in the chip unit," Mr. Tsunakawa said at a news
conference on June 23.
A Toshiba spokesman said he couldn't comment on details of the
planned sale and declined to make Mr. Tsunakawa available for
comment.
In explaining SK Hynix's role, one of the people involved in the
deal said: "SK Hynix isn't a bank that profits from lending
money."
The INCJ and DBJ declined to comment. An SK Hynix spokesman
declined to comment on whether the South Korean company is looking
to acquire a stake in Toshiba.
Western Digital has already expressed concerns about SK Hynix's
inclusion in the consortium.
"SK Hynix's participation increases the likelihood of technology
leakage and harm to the joint venture," Western Digital Chief
Executive Steve Milligan wrote in a letter sent to Toshiba on June
25, which was provided to the media.
A spokesman for Japan's Ministry of Economy Trade and Industry
said the ministry couldn't immediately comment.
Toshiba is rushing to raise capital after its U.S. nuclear
subsidiary Westinghouse Electric Co. filed for chapter 11
bankruptcy protection in March, saddling Toshiba with billions of
dollars in losses. In April, Toshiba warned investors that it might
be unable to stay in business.
SK Hynix was invited to join the consortium after INCJ failed to
attract Japanese electronics companies, the people involved in the
process say. The addition of SK Hynix was needed to raise the size
of the offer, the people involved in the deal said.
Japanese government officials have raised concerns about
technology leakage, but that was primarily regarding Chinese
bidders as Beijing spends tens of billions of dollars to buy
semiconductor technology overseas and develop it domestically.
Toshiba and SK Hynix have fallen out in the past over alleged
technology leakage.
In 2014, Toshiba alleged that SK Hynix illegally obtained
semiconductor research data from a former employee of a Toshiba
joint venture partner that was acquired by Western Digital last
year. SK Hynix agreed to pay Toshiba $278 million to settle a
lawsuit in the dispute. The two companies extended a
license-sharing agreement shortly after resolving the dispute.
A stake in the Toshiba unit would help give SK Hynix a bigger
presence in the NAND chip market, where it lags behind in
technology and market share. Thanks to high demand from smartphone
and computer server makers, sales of NAND flash memory chips
totaled $11.7 billion during the first quarter of this year, headed
by Samsung Electronics Co. and Toshiba and followed by Western
Digital and SK Hynix, according to research firm IHS Markit.
SK Hynix says it is currently investing billions of dollars to
beef up its NAND production capacity.
SK Hynix's potential stake in Toshiba's chip unit could also
raise antitrust challenges that would slow the sale. Toshiba
rejected Western Digital's offers to take over the operations due
partly to concerns that authorities, especially in China, would
block the deal on antitrust objections, people involved in the deal
said.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com, Kosaku
Narioka at kosaku.narioka@wsj.com and Eun-Young Jeong at
Eun-Young.Jeong@wsj.com
(END) Dow Jones Newswires
July 02, 2017 23:50 ET (03:50 GMT)
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