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Apple Considers Buying Part of Toshiba’s Chip Business

Apple is reportedly weighing a bid on Toshiba’s chip business, according to Japanese media reports that were relayed by Reuters Friday. The iPhone maker doesn’t want to buy Toshiba outright, according to those reports. Instead, it’s considering to team up with China’s electronics giant Foxconn for a joint bid.

As part of that proposed deal, Toshiba may also keep a stake in its company, which should ensure that the JV isn’t under majority Chinese control — something that could raise red flags with Japanese regulators. Apple may end up with up to 20 percent, and spend several billion dollars.

Toshiba has been looking to sell its chip business as it is facing an extensive financial crisis, which has in part been triggered by the bankruptcy of its U.S. nuclear energy subsidiary Westinghouse Electric. Other bidders reportedly include Western Digital and fellow chipmaker Broadcom.

For Apple, a deal like this would represent a first step towards taking more control over its entire supply chain. The company has been dependent on a few major manufacturers for key components of its devices, and for example leaned heavily on competitor Samsung to produce the processors used in the iPhone. Owning a part of Toshiba could help Apple not only to secure enough supplies for future products, but also profit from the entire value chain.

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