SanDisk working with bank over sale: Report

Chipmaker SanDisk had hired a bank to explore a potential sale of the business and two of its rivals, Bloomberg News reported.

Micron Technology and Western Digital were discussing with SanDisk about a possible acquisition. SanDisk, operates flash-memory plants with Toshiba in Japan, and any deal would need to be approved by Toshiba.

According to the people, no decision had been made and talks with the companies might not result in a transaction.

SanDisk, valued at $12.6 billion, is one of the largest makers of flash memory, a type of chip used as storage in mobile devices and increasingly in computers and data centers.

Micron, a rival supplier of the technology and Western Digital, maker of hard drives based on spinning magnetic disks, might be interested in adding a source of flash-memory chips to keep future products competitive.

This year so far, had been the biggest ever for semiconductor mergers and acquisitions.

Companies in the $300-billion industry have been hit with a shrinking customer base and SanDisk had struggled over the past two years as sales to Apple had fallen.

Intel announced a $16.7-billion deal to buy programmable logic chipmaker Altera in June (See: Intel acquires Altera for $17 bn) , and in May, Apple chip supplier Avago Technologies said it would pay $37 billion for Broadcom (Avago Technologies to acquire Broadcom Corp for $37 bn).

The Avago-Broadcom deal was the largest takeover till it was surpassed by Dell's $67-billion deal to acquire EMC Corp (Dell to buy EMC for $67-bn in largest tech acquisition).

SanDisk has tough competition from Samsung. Chipmakers are generally facing pressure from hardware giants such as Apple and Samsung. According to commentators, mergers were a way to build scale to lower prices, and perhaps gain some pricing power.

Toshiba has unveiled the latest generation of BiCS FLASH, its 3D stacked cell structure flash memory, a 256Gbit 48 layer device with triple level cell technology. (See: Toshiba unveils 48 layer 3D stacked cell structure flash memory).