Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      19 June 2025

      WhatsApp founders hated ads – Meta is adding them anyway

      19 June 2025

      China’s car factories run cold as price war masks deep overcapacity

      19 June 2025

      Yellow Card, Visa in deal to hasten stablecoin uptake in Africa

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » World » Tim Cook weighs Apple’s biggest deal yet

    Tim Cook weighs Apple’s biggest deal yet

    By Agency Staff15 September 2017
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    The looming deal with Toshiba is about securing the supply of memory chips for Apple products such as the new iPhone 8 and iPhone X models

    It’s been a busy week for Apple. While CEO Tim Cook showed off the 10th anniversary iPhone in California, his lieutenants worked half a world away on what may become the company’s largest deal ever.

    Apple is in talks to invest about US$3bn in Toshiba’s memory chips business as part of a consortium led by Bain Capital, according to people familiar with the matter.

    Apple plans to take an equity stake that could total 16% in a group that also includes Dell, Seagate Technology and SK Hynix, they said.

    That support convinced Toshiba to sign a memorandum of understanding with Bain and work toward a final agreement this month, they said. If the agreement is completed, it may exceed Apple’s largest deal yet, the $3bn acquisition of Beats Electronics.

    The last thing Cook wants is to end up dependent on his arch rival in smartphones, so he wants Toshiba’s chips unit to stay healthy

    Apple is interested in the chip unit because of the strategic importance of flash memory. The compact chips are essential for its iPhones and iPods, storing every photo, video clip and animoji. Only a handful of companies make the highest-end technology and the dominant player is Samsung Electronics. The last thing Cook wants is to end up dependent on his arch rival in smartphones, so he wants Toshiba’s chips unit to stay healthy.

    “A lot of this is opportunism,” says Mark Newman, an analyst with Sanford C Bernstein in Hong Kong. “If Apple is involved, then they have a little bit more say in the industry structure.”

    Toshiba has been in negotiations since January to sell off its chips business and pay for a losses in its nuclear business. The sale has been held up because Western Digital, a joint venture partner with Toshiba in the chips business, has argued it has rights in any sale and filed for arbitration in the US. Toshiba needs to raise the money by March to avoid seeing its shares delisted from the Tokyo Stock Exchange. Toshiba declined to comment.

    Opposed Western Digital

    Apple is helping swing the deal away from Western Digital, one of the Cupertino, California company’s own suppliers that tried to buy the chips unit with KKR & Co. Apple has actively opposed Western Digital’s bid, in part because it would concentrate power within the chip industry, the people said. Apple spokesman Josh Rosenstock declined to comment.

    John Connaughton, Bain’s co-managing partner, confirmed the firm is working with Apple and Dell, without disclosing details of the negotiations.

    Apple CEO Tim Cook

    “There’s a lot of people that want Toshiba Memory to be an independent company,” he said in an interview on Bloomberg Television. “The management is really aligned with us and supports us because we will be that party that retains that independence.”

    Bain issued a statement identifying Seagate and Kingston Technology as partners as well. The US firm said it would honour Western Digital’s contractual terms but that the company is “over-reaching” in asserting its rights.

    Nand flash memory chips are among the most expensive components of the iPhone and the market for the chips is concentrated in the hands of just six suppliers, with Samsung holding more than 40%. For the iPhone maker, Toshiba’s 18% falling completely into the hands of another supplier would further narrow its options and make pricing negotiations tougher. Western Digital had a 13% slice of the market last year and SK Hynix accounted for an similar portion, according to researcher International Data Corp.

    The investment would give Apple better control of a critical supply chain component

    Led in Japan by MD Yuji Sugimoto, Bain worked through spring and early summer to assemble a bid with two state-backed funds, Innovation Network of Japan and Development Bank of Japan. The consortium offered about ¥2.1 trillion ($19.1bn) and was selected as the preferred bidder in June. But as Western Digital and CEO Milligan became increasingly vocal in its opposition, INCJ and DBJ decided to pull back.

    Japan’s ministry of economy, trade & industry then encouraged Toshiba to accept the rival offer from KKR and Western Digital, people familiar with the matter said at the time, in an effort to end the litigation and reach a deal quickly. But Yasuo Naruke, head of Toshiba’s chips business, resisted the proposal, the people said.

    In the meantime, Sugimoto worked to win Apple’s support. The US company had originally backed an offer from Terry Gou, the Taiwanese billionaire whose Foxconn Technology Group makes iPhones. But by this month, it was clear that Japanese opposition to Foxconn was insurmountable. Apple and Cook signed on with Bain.

    The precise composition of the Bain group is still in flux and may change, the people said. There is no guarantee they will be able to reach a final agreement with Toshiba.

    The investment would give Apple “better control of a critical supply chain component”, said Nehal Chokshi, the MD of consumer and enterprise technology at Maxim Group who rates Apple stock a buy.

    After Toshiba announced its MOU with Bain, Western Digital said it is “disappointed” and that it would continue to pursue arbitration claims. Toshiba said Thursday it “regrets” that Western Digital is persistently overstating its rights and that the Japanese company is committed to completing the chip sale by March.

    “Western Digital was playing a very aggressive legal campaign against their partner, arguably taking advantage of Toshiba’s financial distress,” says Newman, “and one part of this is just Apple stepping in and saying, ‘Look, that’s enough’.”  — Reported by Peter Elstrom and Sam Kim, with assistance from Alex Sherman, Ian King, Kiel Porter and Jing Cao, (c) 2017 Bloomberg LP



    Apple Seagate Tim Cook top Toshiba Western Digital
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleCloud rains profit for Oracle
    Next Article McKinsey, KPMG targeted as corruption scandal widens

    Related Posts

    Stolen phone? Samsung now buys you an hour to lock it down

    18 June 2025

    Samsung plots health data hub to link users and doctors in real time

    17 June 2025

    10 red flags for Apple investors

    13 June 2025
    Company News

    Doing more with less: Altron and Microsoft to show the way forward

    19 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.