[THE INVESTOR] Korea’s third-largest conglomerate SK is on the path to becoming the second-biggest memory chip provider in the world, taking one step closer to acquiring a slice of Toshiba’s chipmaking unit.

SK’s semiconductor business SK hynix and its three strategic partners -- US private equity firm Bain Capital, Development Bank of Japan and Innovation Network of Japan -- were picked by Toshiba as the preferred bidder in the sale of its lucrative memory chip business on June 21.   

SK hynix is set to provide loans of 3 trillion won (US$2.62 billion), covering around 15 percent of the buyout price for the global consortium.

SK hynix’s participation in the sale is expected to raise the possibility of the company forging an exclusive partnership with Toshiba, the world’s second-largest memory chipmaker, amid the booming chip business driven by growing demand for smartphones.

“It is too early to say SK hynix might own a significant stake in Toshiba, but possibilities are high that the Korean chipmaker would get chances to cooperate with Toshiba on technological development and production,” said Kim Rok-ho, an analyst at Hana Financial Investment.

If the SK hynix consortium becomes the final owner of the Toshiba unit, the Korean chipmaker is expected to jump from its current No. 4 in the global NAND flash chip market to second, trailing only Samsung Electronics.

If the scenario is realized, the global memory chip market -- comprising both DRAM and NAND chip markets -- would be controlled by Korean chip giants Samsung and SK.

Currently, Samsung has a 36.7 percent share in the global NAND flash market, followed by Toshiba with a 17.2 percent share, Western Digital with a 15.5 percent share and SK hynix with an 11.4 percent share, according to market researcher IHS Markit.

SK has continued making aggressive investments in the semiconductor business. SK’s ambition for chips was unveiled in 2011 as the group took over Hynix and jumped into the semiconductor market for the first time. The group also acquired LG’s wafer manufacturing business LG Siltron in January as part of efforts to enhance securing materials for chips.  

However, SK Group Chairman Chey Tae-won said on June 23 its semiconductor arm’s move to join the acquisition of Toshiba’s chip business is “not finished,” hinting there are still challenges moving forward.

According to industrial sources, the SK deal is expected to face hurdles down the road due to an ongoing legal battle between US-based Western Digital and Toshiba. Western Digital, a long-time ally of the Japanese company, filed a request for arbitration with an international court, in opposition to the sale of the Toshiba unit to the Korea-Japan-US consortium.

By Song Su-hyun /The Korea Herald (song@heraldcorp.com)