SK hynix is expected to partner with US private equity fund Bain Capital in its quest to win over the NAND flash chip unit of Japan’s Toshiba against the Apple and Foxconn joint effort, according to sources Wednesday.

The South Korean chipmaker, second in the global DRAM market and fifth in the NAND market, has formed a consortium with Bain Capital, which has about $75 billion under management and has been engaged in aggressive investments in Japan, industrial sources said.

There had been speculations that SK hynix would seek financial backing from Japanese or foreign financial investors, as its offer price for the Toshiba unit was forecast to reach 21 trillion won ($18.4 billion).

As of late 2016, SK hynix held 4 trillion won in cash, which raised concerns about the company’s financial status as market observers pointed out the deal would be too burdensome for SK.

“The partnership with Bain Capital might have raised the possibility of SK hynix winning the bidding, because the financial capability of the new owner is the key in this deal to salvage the ailing Toshiba,” said an industrial source. “But it’s too early to say things are positive for SK hynix, as other bidders are seeking financial partners as well.”

One potential strong rival partnership could be Apple and Taiwan’s Hon Hai Precision Industry, better known as Foxconn, which has reportedly offered over 31 trillion won in their Toshiba bid.

According to foreign media, Foxconn has sought the backing of the iPhone maker to enhance its position in the bidding. Apple has not yet revealed its official stance. The Taiwanese firm has also reportedly approached Japan’s Softbank for a partnership.

Korean semiconductor-related companies are paying attention to whether the US smartphone provider will really jump into the chip market.

“If Apple gets a stake in the Toshiba flash memory division, Korean NAND providers may lose their biggest customer,” said Lee Min-hee, an analyst at Heungkuk Investment & Securities.

Western Digital, a US chipmaker and longtime partner of Toshiba, has been rumored to be the most likely candidate, but its financial capability is being questioned by Japanese government officials, according to the analyst.

“Excluding Western Digital, the most likely winner would be another US IT firm, SK hynix or Foxconn in that order,” Lee added.

According to the latest report from the Financial Times, California-based chipmaker Broadcom currently appears to be the front-runner in the race to acquire the Toshiba unit, as it has recently teamed up with some Japanese banks to secure at least $9.2 billion. Broadcom has US private equity group Silver Lake as a partner.

By Song Su-hyun  (song@heraldcorp.com)