Toshiba Chip Business Makes Hon Hai Willing to Pay $27 Billion

Toshiba Corp. and the Japanese government want to sell the company’s semiconductor business to a domestic buyer, but foreign bidders are proving more determined and aggressive as the auction heads toward a final decision in the coming weeks.

Taiwan’s Hon Hai Precision Industry Co., South Korea’s SK Hynix Inc. and chipmaker Broadcom Ltd. have all submitted preliminary bids for the Toshiba business valued at 2 trillion yen ($18 billion) or more, people familiar with the matter said. Hon Hai has indicated it may pay as much as 3 trillion yen, in part to force Japanese management into negotiations, said one of the people, asking not to be identified because the matter is private. Hynix is in talks with Japanese investors on a joint bid, in part to overcome political hurdles, the person said.