Apple may invest billions in Toshiba's chip business

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

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

This would help keep Toshiba's memory chip business in favorable US and Japanese hands according to public broadcaster NHK.

However, the Foxconn element of the bid could prove problematic, as there are laws controlling the sale of "sensitive technology" to investors the Japanese government considers a risk to national security. It is noteworthy that a large amount of Apple's iPhones are produced at Foxconn's enterprise there.

The company in January said it would sell a majority stake in its memory chip business as it digs for funds to offset a multi-billion dollar writedown.

According to reports today, Apple is now considering teaming up with Foxconn in an effort to bid for Toshiba's semiconductor business, which is now the second largest flash memory maker in the world.

Also, Japan is hesitant to allow a foreign company to acquire the business, because it doesn't want key Japanese semiconductor technology to fall into foreign ownership. It is also demanding exclusive negotiating rights. First, the 142-year-old electronics conglomerate warned it may not be able to continue as a going concern because of the Westinghouse losses.

The report stated that Foxconn, a major iPhone assembler, may partner with Apple for the bid.

Western Digital's objection has yet to be resolved, but Toshiba has denied a claim by Bloomberg that the sale had been put on hold.

U.S. chipmaker Broadcom looks to be on top of the $18bn+ race for beleaguered Toshiba's flash memory business.

An executive at one of the main creditor banks said it was still uncertain if Western Digital would agree to Toshiba offering its chip unit stake as collateral.

Toshiba needs to raise money from the semiconductor sale to plug the hole in its balance sheet, but the bidding process so far has been rocky.

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