$18 billion deal for Toshiba's memory division further challenged by Western Digital

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Extending the saga even further, Western Digital has notified Toshiba's board of directors that it formally opposes Toshiba's sale of its memory division to any group that has ties to its primary competitor SK Hynix -- and the favored consortium is relying on funding from it.




In a June 25 letter to Toshiba's board of directors, Western Digital filed its opposition, saying that SK Hynix's funding of the deal will result in "leakage" of Western Digital's core technologies to the rival.

"I must make it clear that Western Digital will not consent to a transaction with the proposed consortium," wrote CEO Stephen Milligan. "This potential course of action would make further litigation inevitable."

Toshiba and SK Hynix make strange bedfellows. Toshiba sued SK Hynix over the suspected theft of intellectual property related to flash storage. The claims was settled out of court, and ended up in SK Hynix doling out $278 million in December 2014.

SK Hynix declined comment on the matter to Reuters. The group is contributing to the deal as it sees business opportunities.

Late Friday, Toshiba CEO Satoshi Tsunakawa said that the company was "open" to further talks with Western Digital -- but Toshiba would not make the first move.

A U.S. court ruling on an injunction on the sale is expected on July 14. Toshiba's annual shareholder meeting is June 28.

On June 21, Toshiba chose a consortium formed by Bain Capital, Mitsubishi, Japanese government investors with funding from SK Hynix as the preferred bidder for its memory chip business with a bid of over $17.9 billion. However, the preference has apparently only resulted in a temporary exclusivity, and Foxconn still has a chance to prevail, according to CEO Terry Gou.

Toshiba's memory unit is up for sale in an attempt to cover billions in losses from its bankrupt U.S. nuclear division, Westinghouse. The Westinghouse situation in the U.S. is attributed to a declining political appetite for nuclear power, fewer maintenance demands as a result of power plants destined for closure and a shrinking Navy fleet, plus management failures.

While other bidders were offering higher sums, the Bain/Japan consortium has implicit support from the government. Governmental support in theory will speed up the sale process, and somewhat mitigate concerns about critical technology leaking out of country.

Foxconn chairman Terry Gou confirmed Apple and Dell's participation earlier in June. Kingston was also cited as a consortium partner -- Amazon, Cisco, Google, and Microsoft, meanwhile, were cited as potential backers.

Comments

  • Reply 1 of 11
    robin huberrobin huber Posts: 3,956member
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    edited June 2017 kaitain4
  • Reply 2 of 11
    sergiozsergioz Posts: 338member
    Toshiba represents 20 percent of the NAND market if Apple loses to acquire it, they will be forced to pay higher prices and deal with WD. 
  • Reply 3 of 11
    JinTechJinTech Posts: 1,022member
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    When we have 8 TB flash drives for $200 then we will be good but an 8 TB flash SSD would have to be a RAID and that would cost a fortune.
  • Reply 4 of 11
    robin huberrobin huber Posts: 3,956member
    JinTech said:
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    When we have 8 TB flash drives for $200 then we will be good but an 8 TB flash SSD would have to be a RAID and that would cost a fortune.
    Don't need 8 TB to back up my 1 TB iMac. 
  • Reply 5 of 11
    jony0jony0 Posts: 378member
    JinTech said:
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    When we have 8 TB flash drives for $200 then we will be good but an 8 TB flash SSD would have to be a RAID and that would cost a fortune.
    Don't need 8 TB to back up my 1 TB iMac. 
    Don't need SSD of any quantity to back my iMac of any quantity … at current prices.
  • Reply 6 of 11
    anton zuykovanton zuykov Posts: 1,056member
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    Then you made a very foolish/bad decision, based on your anecdotal evidence. Congrats, great job! Keep it up!

    http://www.pcworld.com/article/2089464/three-year-27-000-drive-study-reveals-the-most-reliable-hard-drive-makers.html
    Over a 36 month span, Hitachi drives had a 96.9 percent survival rate, followed by WD at 94.8 percent and Seagate way below that at 73.5 percent.
    In other words, by doing that, you increased the chance of your HDDs failing, from 5.2% to 26.5%, which is more than 5 times the difference.

    edited June 2017
  • Reply 7 of 11
    maestro64maestro64 Posts: 5,043member
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    Then you made a very foolish/bad decision, based on your anecdotal evidence. Congrats, great job! Keep it up!

    http://www.pcworld.com/article/2089464/three-year-27-000-drive-study-reveals-the-most-reliable-hard-drive-makers.html
    Over a 36 month span, Hitachi drives had a 96.9 percent survival rate, followed by WD at 94.8 percent and Seagate way below that at 73.5 percent.
    In other words, by doing that, you increased the chance of your HDDs failing, from 5.2% to 26.5%, which is more than 5 times the difference.


    This is a subject I have lots of experience with from Work experience stand point and we had 10s of million drive deployed,

    First this company who was doing the backup of data and such using consumer grade products deserve what they got. I would agree in a consumer grade product WD is a better product. However, once you leave this realm, and get into high performance drives, Seagate is a far better product. Part of the reason why consumers view of Seagate is not good is the fact Seagate test and waterfalls their product keeping the best for their OEM customers and anything which does not meet OEM quality is sold into distribution which ends up and all kinds of cheaper products.

    This is just an example of you only get what you pay for, it is not unusual to have a HDD with a 0.5% or less failure rates which is far better than what that study saw. If you want the best quality you have to pay for it, otherwise, you get the luck of the draw. I personal have multiply enterprise class Seagate drive in my home and they are all been running for yrs the longest 8 yrs. I also had WD and both my MyBooks from WD had issues. I also have Toshiba 2.5 drives I use as backups to desktops and laptops and those too have performed very well. But I did not go out and try and find the cheapest drives out there.  


    anton zuykov
  • Reply 8 of 11
    anton zuykovanton zuykov Posts: 1,056member
    maestro64 said:
    First this company who was doing the backup of data and such using consumer grade products deserve what they got. I would agree in a consumer grade product WD is a better product. However, once you leave this realm, and get into high performance drives.
    I thought the thing that was discussed was consumer level HDDs. That is what you get in consumer class products, such as laptops and PCs/Macs/Backup solutions. Whether enterprise class Seagates are the most long-living HDDs, is hardly important to those who will not go that length of specifically buying an enterprise grade electronics (which is likely 99.99% of consumers).
  • Reply 9 of 11
    anton zuykovanton zuykov Posts: 1,056member
    maestro64 said:
    I stopped buying WD backup drives (commonly featured at Costco) because they just don't last. I've had much longer life from Seagate ones. I suppose it won't be long before flash replaces splinning platters altogether, then it won't matter. 
    Then you made a very foolish/bad decision, based on your anecdotal evidence. Congrats, great job! Keep it up!

    http://www.pcworld.com/article/2089464/three-year-27-000-drive-study-reveals-the-most-reliable-hard-drive-makers.html
    Over a 36 month span, Hitachi drives had a 96.9 percent survival rate, followed by WD at 94.8 percent and Seagate way below that at 73.5 percent.
    In other words, by doing that, you increased the chance of your HDDs failing, from 5.2% to 26.5%, which is more than 5 times the difference.


    This is a subject I have lots of experience with from Work experience stand point and we had 10s of million drive deployed,

    First this company who was doing the backup of data and such using consumer grade products deserve what they got. I would agree in a consumer grade product WD is a better product. However, once you leave this realm, and get into high performance drives, Seagate is a far better product. Part of the reason why consumers view of Seagate is not good is the fact Seagate test and waterfalls their product keeping the best for their OEM customers and anything which does not meet OEM quality is sold into distribution which ends up and all kinds of cheaper products.

    This is just an example of you only get what you pay for, it is not unusual to have a HDD with a 0.5% or less failure rates which is far better than what that study saw. If you want the best quality you have to pay for it, otherwise, you get the luck of the draw. I personal have multiply enterprise class Seagate drive in my home and they are all been running for yrs the longest 8 yrs. I also had WD and both my MyBooks from WD had issues. I also have Toshiba 2.5 drives I use as backups to desktops and laptops and those too have performed very well. But I did not go out and try and find the cheapest drives out there. 

    People were discussing consumer level HDDs here, which is why I posted that.
    edited June 2017
  • Reply 10 of 11
    maestro64maestro64 Posts: 5,043member
    maestro64 said:
    First this company who was doing the backup of data and such using consumer grade products deserve what they got. I would agree in a consumer grade product WD is a better product. However, once you leave this realm, and get into high performance drives.
    I thought the thing that was discussed was consumer level HDDs. That is what you get in consumer class products, such as laptops and PCs/Macs/Backup solutions. Whether enterprise class Seagates are the most long-living HDDs, is hardly important to those who will not go that length of specifically buying an enterprise grade electronics (which is likely 99.99% of consumers).


    Actually I would tell you the Seagate drives in a Apple or HP product sold to consumer is still far better than what you would find just buy anyone's drive on the open market. You are the one who sighted a study done by some company who provides backup services and you would expect they would be using a better class of drives than various drive they located god knows where. They placing a drive into a service environment which they were never intended to be in and expected them to preform well. You do not need to buy "enterprise" grade drive to get better performance then what you call 'consumer" grade. The "consumer" grade drive in the article was placed into a 24/7 environment thus the reason the crapped out as such a high failure rate. All the supplier sell a 24/7 drive and those do much better even if they not enterprise level.

    If you are talking about backing up data, why would you trust that to any drive out on the market. Spend a little more money and get better grade of drive one not designed to be a replacement drive to the EOM products. My drive at home for back up especially my NAS are running 24/7 and I made sure they are the better grade of drives without getting into the 15K RPM high Rel drives from Seagate or Hitachi. Seagate makes a drive they call Nearline, they are high capacity, high Rel, if you are going to back up this should be your choice.  

  • Reply 11 of 11
    anton zuykovanton zuykov Posts: 1,056member
    maestro64 said:
    maestro64 said:
    First this company who was doing the backup of data and such using consumer grade products deserve what they got. I would agree in a consumer grade product WD is a better product. However, once you leave this realm, and get into high performance drives.
    I thought the thing that was discussed was consumer level HDDs. That is what you get in consumer class products, such as laptops and PCs/Macs/Backup solutions. Whether enterprise class Seagates are the most long-living HDDs, is hardly important to those who will not go that length of specifically buying an enterprise grade electronics (which is likely 99.99% of consumers).

    They placing a drive into a service environment which they were never intended to be in and expected them to preform well.

    The problem is that, not only Seagates were subject to "unexpected" conditions, but all those drivers were, yet Seagates came out the worst in terms of life-span as well as failure rate. It is just a fact of life. Are you saying that if those Seagates were put in a better environment, they would have performed better than the rest? But that makes zero engineering sense, since that formulation of what a test environment should be for that to happen, indicates that the product is inferior. Products that perform best in the most adverse conditions are expected to perform on the same level or better in less adverse conditions.

    "If you are talking about backing up data, why would you trust that to any drive out on the market. Spend a little more money and get better grade"
    Which indicates that WD would be a better choice, since it performed well even in the condition is was never meant/designed for.

    edited June 2017
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