Apple, Amazon, Google identified as bidders for Toshiba's NAND flash memory business
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.
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
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.
Agreed. Hell, why not toss Facebook and Uber into the mix as possible suitors. That would make as much sense.
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.
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.
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.
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.
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.
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?
You just reminded me of Coupling, by Moffat!