Hony is going to outsource and sell operations at Elpida Hiroshima DRAM plant its bid for the bankrupt Japanese chipmaker is successful, the Nikkei business daily claims.

Hony has named SMIC as a potential customer.  IT is is bidding along with fellow private equity firm TPG Capital. Chipmakers such Micron, Toshiba and Hynix have all been linked to the auction for the world's third-largest maker of dynamic random access memory (DRAM) chips, in which second-round bids are due late this week.

Hony's parent, Legend, is also the top shareholder in Lenovo which relies on DRAM chips from Elpida and Samsung for its computers and smartphones. Price disputes with Samsung have led Lenovo to increase its dependence on Elpida for supply, causing Lenovo worries about chip supplies if Elpida fell into the hands of others.