Apple, Amazon, Google identified as bidders for Toshiba's NAND flash memory business

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Three tech firms -- Apple, Amazon, and Google -- have reportedly joined the considerable list of bidders of Toshiba's NAND flash memory business, now on the market as Toshiba looks to raise $9 billion to cover losses at its U.S. nuclear unit, Westinghouse.




The new entrants' bidding prices are unknown, according to Japanese publication Yomiuri Shimbun, quoted by Reuters. On Friday however, two joint bidders -- chipmaker Broadcom, and private equity firm Silver Lake Partners -- were reported to have bid about $18 billion.

Other bidders are believed to include various financial investors as well as memory makers Micron, SK Hynix, and Western Digital, the latter of which already operates a chip plant with Toshiba in Japan. Both Micron and SK Hynix count Apple as a client.

Two other Apple partners, Foxconn and TSMC, have previously been rumored as bidders but could be out of the running because of Japanese national security concerns. Toshiba is in fact thought to be leaning towards U.S. companies, not only because of security but because going in that direction could ease dealings with the U.S. government over Westinghouse.

If Apple were to win a bid it would give the company a lock on memory supply for Macs, iPhones, iPads, and other devices, likely removing any production bottlenecks.

At the same time however it would have to deal with Toshiba's legacy clients, and either phase them out or enter the global memory business. The latter situation is unlikely, since memory supply isn't an area of Apple expertise and the company would have to sell chips to rival electronics makers. Apple normally keeps hardware as exclusive as possible -- even some of its Beats audio gear, nominally platform-agnostic, now charges through Lightning instead of micro-USB.

Comments

  • Reply 1 of 19
    macxpressmacxpress Posts: 4,681member
    If I were Apple, I'd really try to snatch this up. This is a place where I think Apple should spend some money unless someone know's of some new technology coming soon that replaces NAND flash. 
    watto_cobra
  • Reply 2 of 19
    Why mention Westinghouse in the teaser and the article itself if you're not going to provide any insight into why Westinghouse is relevant to this discussion?
  • Reply 3 of 19
    brucemcbrucemc Posts: 1,488member
    Apple at least could conceivably have a reason to buy them, if they felt that, like CPU/GPU, it was strategic to have this in house (and even that is quite a stretch).  But Google and Amazon?
    randominternetpersonwatto_cobra
  • Reply 4 of 19
    macxpress said:
    If I were Apple, I'd really try to snatch this up. This is a place where I think Apple should spend some money unless someone know's of some new technology coming soon that replaces NAND flash. 

    Why buy the cow when you can get the milk for... er, at market prices?  Apple's supply chain strategy has worked great for the past decade or two.  Why change now?  At some point (be that in 2 years or 5 years or perhaps longer) this huge capital expense will be obsolete. 
    starwars
  • Reply 5 of 19
    brucemc said:
    Apple at least could conceivably have a reason to buy them, if they felt that, like CPU/GPU, it was strategic to have this in house (and even that is quite a stretch).  But Google and Amazon?

    Agreed.  Hell, why not toss Facebook and Uber into the mix as possible suitors.  That would make as much sense.
    brucemcwatto_cobra
  • Reply 6 of 19
    irelandireland Posts: 17,492member
    Apparently
  • Reply 7 of 19
    starwarsstarwars Posts: 67member
    Agree on this. Apple is not in memory business. And unless it holds some key patents or technologies that it could substantially benefit from, the deal is unjustifiable and very unlikely.
    macxpress said:
    If I were Apple, I'd really try to snatch this up. This is a place where I think Apple should spend some money unless someone know's of some new technology coming soon that replaces NAND flash. 

    Why buy the cow when you can get the milk for... er, at market prices?  Apple's supply chain strategy has worked great for the past decade or two.  Why change now?  At some point (be that in 2 years or 5 years or perhaps longer) this huge capital expense will be obsolete. 

  • Reply 8 of 19
    Herbivore2Herbivore2 Posts: 362member
    sog35 said:
    Google and Amazon are in the bidding to jack up the price. Bunch of clowns. They have no need for buying a NAND company. They only sell a couple thousand devices a year.
    Both companies have delusions of grandeur and both expect to be competitive in hardware, eventually achieving serious marketshare in devices. 

    Amazon has a legitimate plan at least. Google is completely lost and clueless. They are legitimately worried that Apple's move will drive up the open market price of NAND flash. It very likely will. But Google sells so few Pixels, it is ridiculous for them to even attempt this. Google will destroy the company through mismanagement like they did to Motorola and Nest. The result will be even fewer players with Apple still driving the show. It will be even worse for Google in the long run. 

    Amazon at least has a decent chance at keeping the memory maker afloat. Not in the same league as Apple, but still head and shoulders above Google. 
    watto_cobraargonaut
  • Reply 9 of 19
    tzeshantzeshan Posts: 1,847member
    Why buy a losing Toshiba?  Intel and Micron have new memory technology.  Toshiba is losing.  
  • Reply 10 of 19
    The main reason I want Apple to grab Toshiba's memory business is because Amazon is going after it.  Seemingly, Wall Street sees Jeff Bezos as a god CEO who can do no wrong.  There's always this endless praise for Amazon.  Everything Amazon does is said to be some sort of a genius move and that's why Amazon has a P/E of 141 to Apple's 17.  Amazon is called the great disrupter and the big investors love disrupters, especially ones who will try to put all other companies out of business.  I'd like to see Apple try to get some sort of disruptive business that will give them some sort of an advantage over other companies.  Apple is being totally disrespected and is always being called a stagnating company.  Maybe a new business will give Apple some respectability in Wall Street's eyes and boost the P/E to at least Google or Microsoft's P/E territory.  I don't hear any Amazon investors moaning about Amazon trying to acquire Toshiba's memory business and Amazon isn't even all that profitable or has anywhere close to Apple's reserve cash pile.

    Apple can best afford Toshiba's memory business and certainly is a better fit than either Google or Amazon.  At least Apple can use those chips considering all the devices Apple sells.  Maybe the company as plenty of IP Apple can use or keep out the hands of rival chipmakers.  NAND Flash is used in SSDs and supposedly SSDs are going to be replacing spinning hard drives within the next few years.  I don't think Apple would be making a huge mistake by grabbing a NAND maker.

    I mainly see Apple doing this as a defensive move against Amazon and Google.  I'm getting annoyed how those FANG stocks get all the praise and respect of being perfect companies and Apple gets zilch respect.  Why give Amazon more leverage to grab a higher P/E?  A P/E of 140 or so is already ludicrous for Amazon.  If a company such as Intel Corp. just bought Mobileye for $15B then I'm sure Apple should be able to get Toshiba's memory business without batting an eye.
    watto_cobra
  • Reply 11 of 19
    palominepalomine Posts: 361member
    Toshiba is the parent company of Westinghouse these days.  Westinghouse is in deep trouble over nuclear power plant construction cost overruns.  Westinghouse tried to stem the cost overruns by buying one of the construction companies. Due to all the backbiting in the construction company, all they got was more problems and bunch of unfinished nuke power plants with huge cost overruns. There are no serious bidders for the nuke plants they have started. You can do a search to get the history of all of this.
    personally, I'm glad these plants are on hold. IMHO nothing about nuclear power makes any sense these days. The cost per kilowatt hour is too close to renewables prices, and more expensive than natural gas. Not to mention the huge issue of nuclear waste storage, cost of plants and maintenance, accident liabilities.

    I agree, that Apple wouldn't want the NAND division, unless there is something else there that hasn't been mentioned yet.
  • Reply 12 of 19
    sog35 said:
    Google and Amazon are in the bidding to jack up the price. Bunch of clowns. They have no need for buying a NAND company. They only sell a couple thousand devices a year.

    I am not sure about Amazon selling only couple thousand devices a year (I would assume Kindle tablets sell much more than that), but google does NOT sell any hardware of their own making. Pixel phones are manufactured by HTC, much like earlier Nexus phones were manufactured by Huawei/LG. Google just puts their label on the Pixel phones (much like Micromax puts their own label on Chinese phones and call it their own in India). It is not their own hardware by any means. They just don't have any business acquiring Toshiba.
  • Reply 13 of 19
    brucemcbrucemc Posts: 1,488member
    The main reason I want Apple to grab Toshiba's memory business is because Amazon is going after it.  Seemingly, Wall Street sees Jeff Bezos as a god CEO who can do no wrong.  There's always this endless praise for Amazon.  Everything Amazon does is said to be some sort of a genius move and that's why Amazon has a P/E of 141 to Apple's 17.  Amazon is called the great disrupter and the big investors love disrupters, especially ones who will try to put all other companies out of business.  I'd like to see Apple try to get some sort of disruptive business that will give them some sort of an advantage over other companies.  Apple is being totally disrespected and is always being called a stagnating company.  Maybe a new business will give Apple some respectability in Wall Street's eyes and boost the P/E to at least Google or Microsoft's P/E territory.  I don't hear any Amazon investors moaning about Amazon trying to acquire Toshiba's memory business and Amazon isn't even all that profitable or has anywhere close to Apple's reserve cash pile.

    Apple can best afford Toshiba's memory business and certainly is a better fit than either Google or Amazon.  At least Apple can use those chips considering all the devices Apple sells.  Maybe the company as plenty of IP Apple can use or keep out the hands of rival chipmakers.  NAND Flash is used in SSDs and supposedly SSDs are going to be replacing spinning hard drives within the next few years.  I don't think Apple would be making a huge mistake by grabbing a NAND maker.

    I mainly see Apple doing this as a defensive move against Amazon and Google.  I'm getting annoyed how those FANG stocks get all the praise and respect of being perfect companies and Apple gets zilch respect.  Why give Amazon more leverage to grab a higher P/E?  A P/E of 140 or so is already ludicrous for Amazon.  If a company such as Intel Corp. just bought Mobileye for $15B then I'm sure Apple should be able to get Toshiba's memory business without batting an eye.
    Making a large acquisition decision because some other company may do so is pretty bad management.  Fortunately Apple has demonstrated that they do not operate in that manner.  Apple makes purchases based on their strategic plan - not reacting to some other company's plan - especially if that company (Amazon) is in an entirely different market.  Apple almost always makes acquisitions to fill technology gaps - not for production (like this rumour), and not to buy revenue streams.

    Let Wallstreet fawn over Amazon.  The love affair will end sometime. Now, Amazon's share price is not quite as overvalued as some think based on P/E ratio, because it has always deliberately taken any "E" and spent it (sometimes wisely, sometimes not).  Amazon is best valued on a cash flow basis - but even here they are certainly "very highly valued".  History has shown that companies with very valuations to earnings or cash flow eventually come down to earth.
    muthuk_vanalingamargonaut
  • Reply 14 of 19
    afrodriafrodri Posts: 190member
    sog35 said:
    Google and Amazon are in the bidding to jack up the price. Bunch of clowns. They have no need for buying a NAND company. They only sell a couple thousand devices a year.
    Both companies have delusions of grandeur and both expect to be competitive in hardware, eventually achieving serious marketshare in devices. 

    Amazon has a legitimate plan at least. Google is completely lost and clueless. They are legitimately worried that Apple's move will drive up the open market price of NAND flash. It very likely will. But Google sells so few Pixels, it is ridiculous for them to even attempt this. Google will destroy the company through mismanagement like they did to Motorola and Nest. The result will be even fewer players with Apple still driving the show. It will be even worse for Google in the long run. 

    Amazon at least has a decent chance at keeping the memory maker afloat. Not in the same league as Apple, but still head and shoulders above Google. 
    Amazon spends several billion dollars a year on hardware for their cloud services (AWS). A decent chunk of that is probably on NAND memory. I would say this is less about mobile devices, and more about servers. 
  • Reply 15 of 19
    sog35 said:
    Google and Amazon are in the bidding to jack up the price. Bunch of clowns. They have no need for buying a NAND company. They only sell a couple thousand devices a year.
    Both companies have delusions of grandeur and both expect to be competitive in hardware, eventually achieving serious marketshare in devices. 

    Amazon has a legitimate plan at least. Google is completely lost and clueless. They are legitimately worried that Apple's move will drive up the open market price of NAND flash. It very likely will. But Google sells so few Pixels, it is ridiculous for them to even attempt this. Google will destroy the company through mismanagement like they did to Motorola and Nest. The result will be even fewer players with Apple still driving the show. It will be even worse for Google in the long run. 

    Amazon at least has a decent chance at keeping the memory maker afloat. Not in the same league as Apple, but still head and shoulders above Google. 
    Google builds a lot of their own servers, that's why they are interested, not for a handful of Pixels
    muthuk_vanalingamafrodri
  • Reply 16 of 19
    freeperfreeper Posts: 77member
    sog35 said:
    Google and Amazon are in the bidding to jack up the price. Bunch of clowns. They have no need for buying a NAND company. They only sell a couple thousand devices a year.
    Both companies have delusions of grandeur and both expect to be competitive in hardware, eventually achieving serious marketshare in devices. 

    Amazon has a legitimate plan at least. Google is completely lost and clueless. They are legitimately worried that Apple's move will drive up the open market price of NAND flash. It very likely will. But Google sells so few Pixels, it is ridiculous for them to even attempt this. Google will destroy the company through mismanagement like they did to Motorola and Nest. The result will be even fewer players with Apple still driving the show. It will be even worse for Google in the long run. 

    Amazon at least has a decent chance at keeping the memory maker afloat. Not in the same league as Apple, but still head and shoulders above Google. 
    Google builds a lot of their own servers, that's why they are interested, not for a handful of Pixels
    Ha ha. It took only a few comments from competition haters/bashers to finally come up with a legitimate reason for why one of the world's largest technology companies would want to own a memory device making company. Good show. In addition, Google competes with Amazon as a cloud provider - or at least they try to when in reality they are a distant third behind Microsoft and Amazon ... Amazon is #1 because they were first and had a long head start, Microsoft meanwhile was able to start after Google did and significantly surpass them because Microsoft has the enterprise customer base, credibility, know how and trust that Google lacks - so their need in this area is as legitimate as Amazon's.

    I will also point out that Google bought Motorola - which was already bleeding money so no Google did not run them into the ground - in order to acquire their patent portfolio, or more to the point to keep Microsoft from getting them and using them against Android device manufacturers. A lot of you forget that 6-7 years ago, it still was not clear at all that Android would succeed, and the presumption was that if Android failed, Windows Mobile would take its place. The western tech media had gotten used to viewing everything through the lens of the Microsoft/Apple duopoly for decades, and presumed that at some point Microsoft would overtake Google - which back then was viewed as a lesser entity not only to Microsoft, but Amazon and even Yahoo by the tech media - and restore things to their rightful place, with Samsung, LG, HTC and the rest simply abandoning Android for Windows Mobile. Microsoft failed, partially due to their own incompetence, but also because Google made a lot of moves specifically aimed at fending off Microsoft, and buying Motorola was one of them.

    Finally, I do not get the point of being angry at Wall Street's love of Amazon and Bezos. Apple is, er, not the only tech company in America. Let me put it another way: Apple is pretty much the only large tech hardware company left. HP, IBM, NCR, DEC, Dell, RCA, Westinghouse, AT&T, Sharp, Zenith, Sperry, Compaq, Intel, Sun etc. are either out of business, have been bought by (foreign) competitors or are severely diminished. So if you are going to write about - and hype - American tech companies, it is going to be the software/services companies. And the top 3 software/services companies? Microsoft, Google and Amazon in some order. That Apple diehards have reasons - some more legitimate than others - to hate all 3 companies doesn't change things. If the tech writers and fund managers can't talk about Apple 24/7 who else are they going to turn to? Especially when it comes to companies that people have actually heard of because they offer a product or service that consumers - regular people - actually buy or use, which excludes the likes of Oracle and Salesforce. In any event, Google and particularly Amazon's stock crashing and burning won't accomplish a thing positive for Apple, so there is no reason to root against (or for) companies that aren't direct competitors with Apple and whose success or failure have nothing to do with Apple. So a few million people buy $200 Android phones on Amazon.com, and a few enterprise companies use Google Cloud for platform-as-a-service. Apple doesn't sell $200 smartphones or offer enterprise cloud services - and they never will and there are good reasons why they shouldn't - so what does it matter?
  • Reply 17 of 19
    maestro64maestro64 Posts: 4,371member
    I do not think Apple is interested in buying a memory fab, if their name is being thrown around this most likely due to them backing someone like TSMC or Foxconn. When this kind of information leaks out, it is all about driving up the bids. Amazon has not cash so their is no threat there, Apple and Google have case so the real companies looking to buy like Micron or Hynix will have to pay more if they really want it, this is the message that is being sent.
    edited April 2017
  • Reply 18 of 19
    ireland said:
    Apparently

    You just reminded me of Coupling, by Moffat!
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