Western Digital and Toshiba are said to be planning to enter into an agreement under which WD will no longer oppose the acquisition of the nand memory division of Japan’s Toshiba.
Under the agreement, Western Digital will end the arbitration cases that the company tried to block the acquisition. In return, Toshiba is authorizing WD to invest in a new production line of memory chips, which will become operational in 2018. That report two sources familiar with the matter to Reuters.
According to one of the sources, existing agreements of the joint venture between Western Digital and Toshiba will also be extended beyond 2021. In addition, Western Digital will invest in a completely new chip factory that Toshiba plans to build in northern Japan next year.
A Toshiba spokesperson said the company is open to such a settlement or agreement, but he did not provide further details. According to him, it is “not a fact that an agreement with Western Digital has been reached.” Western Digital has declined to comment.
In late October, Toshiba shareholders approved the sale of the nand memory division to a consortium led by investor Bain Capital. Sk Hynix, Apple and Dell are also part of the consortium. So is the Innovation Network Corp of Japan, a public-private partnership between the Japanese government and major technology companies. Because of these Japanese investors, more than 50 percent of the shares remain in the hands of Japanese companies. This was an important wish of the Japanese government.
Toshiba worked with SanDisk in a joint venture until Western Digital acquired SanDisk last year. WD was also interested in acquiring the memory division and felt that the current sale to the consortium would not serve its interests in the joint venture. Partly because of this, WD went to an arbitration committee earlier to prevent Toshiba from selling the chip division. This legal battle ax will now likely be buried if Toshiba and Western Digital actually come together.
Toshiba spun off its nand memory production on April 1 into a separate company called Toshiba Memory, and has been looking to sell this part for some time, as it is in financial trouble after a series of setbacks at Toshiba’s US nuclear unit Westinghouse. After Samsung, Toshiba is currently the world’s largest manufacturer of nand memory.