SK Hynix in the run to buy stake in Toshiba chip business

As reported last month, Toshiba needs cash fast to avoid serious balance sheet issues and is in the process of selling a minority stake of about 20 percent in its profitable semiconductor division.

Finding a buyer isn't easy as the Japanese conglomerate wants to have everything finalized before the end of its fiscal year in March, so it can offset a hefty multi-billion dollar writedown on its nuclear power operations. This rules out a purchase from Western Digital as that would take too long due to the antitrust issues it would entail. WD would be a natural fit considering both companies already have a close cooperation via SanDisk, which was bought out by WD.

Reuters reports Toshiba favors a deal with a private equity firm as this would be the fastest route to sell a piece of its chip business, but it seems several other chip maker are making a bid. In particular, SK Hynix announced it submitted a non-binding bid to buy the slice of Toshiba's semiconductor unit.

Other rumored bidders include Western Digital, Bain Capital, and Micron Technology. Analysts believe the SK Hynix bid may not pose an antitrust hurdle because the South Korean memory maker has a small enough overall marketshare.

Toshiba's chip rivals would benefit from the Japanese firm's technological know-how in high-end NAND products and a boost in chip supply, analysts said. Toshiba is the world's second-largest maker of flash memory.

Interest in the stake is heating up with sources telling Reuters that bids had also come from investment funds, California-based data storage company Western Digital Corp and Micron Technology, amid a surge in memory chip prices.

The news agency also notes that Toshiba could eventually seek additional investment from other chipmakers once its immediate financial crisis has passed.