Toshiba sues Western Digital for $1.07B to keep sale of memory chip unit on track
Toshiba on Wednesday filed a $1.07 billion lawsuit against Western Digital in Tokyo District Court, trying to halt any intervention in the sale of Toshiba's memory chip business to a consortium including Bain Capital and Japanese government investors.
At the core of the dispute is Toshiba's main chip factory, which is operated as a joint venture with Western Digital. The latter has claimed that under terms of the partnership, it has to grant consent for any sale -- it has moreover opposed funding by rival storage maker SK Hynix, which it claims will get access to WD technology if the proposed sale arrangement goes through.
Toshiba is now blocking WD's access to information in the joint venture, according to Bloomberg, since part of the lawsuit's allegations include charges that WD staff gained improper access to proprietary data. Reuters noted that specifically, the company is shutting out WD workers based outside the Yokkaichi chip factory.
Toshiba had been aiming to announce a sale by today's shareholders meeting, but CEO Satoshi Tsunakawa said that a deal has been held up because of differences within the Bain/Japan consortium. Instead the company is simply hoping to reach an agreement as soon as possible, and finish the transaction by the end of its financial year next March.
At the meeting Tsunakawa criticized WD, but said Toshiba might be willing to make concessions in the interests of solving legal battles as soon as possible.
On Tuesday WD resubmitted a bid for the memory unit, offering it in partnership with U.S. equity firm KKR. Reuters sources indicated that the Japanese government investors in the leading bid -- Innovation Network Corp of Japan, and the Development Bank of Japan -- would be invited to participate in WD's offer. Indeed the Japanese government has been concerned about keeping Toshiba's technology under domestic control.
A U.S. court, meanwhile, is scheduled to hear a WD injunction request on July 14.
Last Friday, Foxconn chairman Terry Gou claimed that his bidding consortium -- including Apple, Dell, and Kingston -- still had a "50 percent chance" of winning, despite a preferred bidder already being selected, and likely opposition from the Japanese government.
At the core of the dispute is Toshiba's main chip factory, which is operated as a joint venture with Western Digital. The latter has claimed that under terms of the partnership, it has to grant consent for any sale -- it has moreover opposed funding by rival storage maker SK Hynix, which it claims will get access to WD technology if the proposed sale arrangement goes through.
Toshiba is now blocking WD's access to information in the joint venture, according to Bloomberg, since part of the lawsuit's allegations include charges that WD staff gained improper access to proprietary data. Reuters noted that specifically, the company is shutting out WD workers based outside the Yokkaichi chip factory.
Toshiba had been aiming to announce a sale by today's shareholders meeting, but CEO Satoshi Tsunakawa said that a deal has been held up because of differences within the Bain/Japan consortium. Instead the company is simply hoping to reach an agreement as soon as possible, and finish the transaction by the end of its financial year next March.
At the meeting Tsunakawa criticized WD, but said Toshiba might be willing to make concessions in the interests of solving legal battles as soon as possible.
On Tuesday WD resubmitted a bid for the memory unit, offering it in partnership with U.S. equity firm KKR. Reuters sources indicated that the Japanese government investors in the leading bid -- Innovation Network Corp of Japan, and the Development Bank of Japan -- would be invited to participate in WD's offer. Indeed the Japanese government has been concerned about keeping Toshiba's technology under domestic control.
A U.S. court, meanwhile, is scheduled to hear a WD injunction request on July 14.
Last Friday, Foxconn chairman Terry Gou claimed that his bidding consortium -- including Apple, Dell, and Kingston -- still had a "50 percent chance" of winning, despite a preferred bidder already being selected, and likely opposition from the Japanese government.
Comments
thats good news! 👍
Intel's Optane has the potential to seriously disrupt the memory industry but so far the product remains vaporware.
There's very little chance that WD/Sandisk or Toshiba remains competitive over the long term. They aren't currently competitive with Samsung and they won't be with Intel/Micron if Optane is ever released to market.
Fighting over Toshiba's memory unit seems a little over the top to me.
The chips are not, they are made in Japan, the cards are packaged elsewhere. San Disk and Toshiba shares the same foundry for long time and the NAND tech in the chip was developed in the Silicon Valley. The difference between okay NAND and great NAND is the algorithm which write the data to a cell and then the only going wear leveling of those cell so they do not wear out too soon. Everyone is usually mostly the same substrate for the NAND, the memory controller and software which runs the NAND is where the secrets exist.
BTW Seagate use to Own San Disk before spinning them off.