The world’s second largest memory chipmaker SK Hynix Inc. has made its most ambitious wager to date for a leap to the world’s top place in memory industry by joining the $3 billion international bid for the semiconductor unit of Japan’s Toshiba Corp., the worlds’ second largest maker of flash memory chips.

According to sources from the business circles and investment banking industry on Monday, SK Hynix has bidden for the equity offering in preferred stocks from Toshiba worth 300 billion yen ($2.68 billion). Toshiba plans to convert the preferred shares to common stock equivalent to 19.9 percent stake in a new semiconductor unit that the company is spinning off.

Toshiba, still reeling from high-profile accounting scandal in 2015, in a board meeting last month decided to spin off its lucrative semiconductor division to avoid multibillion-dollar write-down from colossal losses from its nuclear business.

Losses from U.S. nuclear projects of its Westinghouse Electric unit have reached 700 billion yen. The company is on the brink of falling into deficit net worth upon reflecting the loss, given its equity capital standing of 360 billion yen as of end-September last year. It attempts to buy time to stay afloat by issuing preferred shares with convertible option as demerger takes time.

Toshiba commands 21 percent in the global market for flash memory chips, a volatile but growing segment as they are increasingly replacing traditional hard disc drives for storage, to run in the second place after Samsung Electronics that leads with a 30.2 percent share.

SK Hynix’s bid however won’t be easy as priority could go to Toshiba’s U.S. partner Western Digital that owns the third largest flash producer SanDisk with a 15.5 percent share and runs a flash-memory manufacturing joint-venture with Toshiba in Japan.

Shares of SK Hynix closed Tuesday at 53,300 won, down 0.74 percent or 400 won from the previous session.

By Han Woo-ram and Lee Dong-in

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