Toshiba chip exec says interested in SanDisk bid
YOKOHAMA, Japan (Reuters) - The head of Toshiba's (6502.T) semiconductor business said the flash memory maker was interested in a bid for partner SanDisk (SNDK.O) to prevent a takeover by rival Samsung (005930.KS).
South Korea's Samsung Electronics Co, the world's biggest memory chip maker, said earlier this month that it may buy SanDisk Corp, in a move that could frustrate catch-up plans by Toshiba to nearly double its chip production capacity in partnership with SanDisk.
"We need to take preventive steps, if (SanDisk) looks like it'll be acquired," Corporate Senior Vice President Shozo Saito told reporters on the sidelines of the Industry Strategy and Technology Forum on Tuesday.
When asked about the possibility of a bid, he said Toshiba "was interested" but added that it was not in concrete talks.
Samsung, Toshiba and other chip makers are racing to boost output and lower per-chip costs even as weak prices of flash memory, used in digital cameras, mobile phones and music players, hurt revenue and their appetite to invest.
Acquiring SanDisk, known for its memory storage cards, could help Samsung cut licensing fees it pays out and help it expand its market share at the expense of Toshiba, smarting from losses, analysts said.
SanDisk, whose shares have fallen 55 percent since a peak in mid-May, closed at $14.41 on Monday, valuing the company around $3.5 billion.
The flash drive maker warned in July that it would take several quarters to shed inventory amid an industrywide supply glut, and said it would push out a decision to invest in one of two plants Toshiba hopes to build in 2010.
SanDisk was also the subject of speculation in August that computer storage drive maker Seagate Technology Inc STX.N could be interested in buying a stake.
Shares of Toshiba closed down 4.2 percent at 481 yen, against a 5 percent slide in the Nikkei average .N225.
(Reporting by Noriyuki Hirata; Writing by Mayumi Negishi)