Toshiba sues Western Digital for $1.07B to keep sale of memory chip unit on track

Posted:
in General Discussion edited June 2017
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.

Comments

  • Reply 1 of 10
    sergiozsergioz Posts: 338member
    Nice move ha ha 
    thats good news! 👍
  • Reply 2 of 10
    maestro64maestro64 Posts: 5,043member
    WD has a lot to be concerned about, San disk (WD) it's the technology driver and Toshiba rides on their technology. Toshiba provides the manufacturing tech that WD uses.
    fahlman
  • Reply 3 of 10
    Herbivore2Herbivore2 Posts: 367member
    Samsung is going decimate the rest of the memory industry in any case. In my case, if the memory isn't manufactured by Samsung I won't purchase it. 

    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. 
    edited June 2017
  • Reply 4 of 10
    viclauyycviclauyyc Posts: 849member
    maestro64 said:
    WD has a lot to be concerned about, San disk (WD) it's the technology driver and Toshiba rides on their technology. Toshiba provides the manufacturing tech that WD uses.
    But but all of my sandisk card are made in China. Even the high end one (10yrs ago)
  • Reply 5 of 10
    viclauyycviclauyyc Posts: 849member
    Samsung is going decimate the rest of the memory industry in any case. In my case, if the memory isn't manufactured by Samsung I won't purchase it. 




    I only my buy memory from Kingston and memory card from sandisk. Works fine with me, especially on my MBP 
  • Reply 6 of 10
    viclauyycviclauyyc Posts: 849member
    This is how Japanese company treats a major shareholder? Sounds like an American.
  • Reply 7 of 10
    dysamoriadysamoria Posts: 3,430member
    Boy, this story never ends. Why can't companies just stay themselves? Oh, right, shareholders.
  • Reply 8 of 10
    lukeilukei Posts: 379member
    viclauyyc said:
    Samsung is going decimate the rest of the memory industry in any case. In my case, if the memory isn't manufactured by Samsung I won't purchase it. 




    I only my buy memory from Kingston and memory card from sandisk. Works fine with me, especially on my MBP 
    Kingston don’t make memory chips. They buy them from companies like Samsung and build memory modules 
  • Reply 9 of 10
    maestro64maestro64 Posts: 5,043member
    viclauyyc said:
    maestro64 said:
    WD has a lot to be concerned about, San disk (WD) it's the technology driver and Toshiba rides on their technology. Toshiba provides the manufacturing tech that WD uses.
    But but all of my sandisk card are made in China. Even the high end one (10yrs ago)


    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.  

  • Reply 10 of 10
    maestro64maestro64 Posts: 5,043member
    viclauyyc said:
    Samsung is going decimate the rest of the memory industry in any case. In my case, if the memory isn't manufactured by Samsung I won't purchase it. 




    I only my buy memory from Kingston and memory card from sandisk. Works fine with me, especially on my MBP 
    Kingston, get all the memory that no OEM would buy from Samsung, Hynix or Micro, The OEM get the best and what is left is sold on the open market to companies like Kingston. You would be better buying from Mircon/Crucial.
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