Toshiba and Western Digital have finally reached an agreement on the long-running dispute regarding Toshiba's sale of its semiconductor division to Western Digital's rivals, agreeing to terms that will see the two companies share fabrication facility investments.
The financially-troubled Toshiba, which took a major bath over a disastrous attempt to break into the US nuclear energy market, announced it would spin-off its semiconductor arm, minus its imaging sensor business, in January this year. As SK Hynix and Micron began sniffing around the possibility of a share in the resultant new company, however, Western Digital grew antsy - and when Toshiba picked the company's rivals as the winning bidders WD sought to halt the sell-off altogether, claiming that it broke the terms of a joint venture agreement Toshiba had signed with its SanDisk subsidiary prior to WD's acquisition of same.
While the joint venture continued, Toshiba and Western Digital have been at loggerheads ever since. Toshiba sued WD for damages related to its attempts to block the deal, and even after inking the deal it found that WD was still blocking the agreement.
Now, though, WD is finally backing off and allowing the sale to go through, three months after it was supposedly done and dusted. In an agreement announced late last night the two companies have settled all outstanding legal actions, with Toshiba Memory Corporation and Western Digital agreeing to jointly invest in the under-construction Fab 6 facility in Yokkaichi on the understanding it will be dedicated to production of the pair's jointly-developed BiCS 3D NAND flash parts. The deal will also extend, the companies have confirmed, to a planned second facility in Iwate, while the Flash Alliance joint venture is extended to the end of 2029, Flash Forward to 2027, and Flash Partners to 2029.
'Western Digital's core priorities have always been to protect the JVs [Joint Ventures] and ensure their success and longevity, guarantee long-term access to NAND supply, protect our interests in the JVs, and create long-term value for our stakeholders,' claims WD's chief executive Steve Milligan of his company's behaviour during the deal. 'We are very pleased that these agreements accomplish these critical goals, allow Toshiba to achieve its objectives, and also enable us to continue delivering on the power of our platform. I want to thank the hardworking teams at Western Digital and TMC for the dedication they have exhibited over the past several months, operating the JVs without interruption, and we look forward to building upon the success of our 17 year partnership'
'We are very pleased to have reached this outcome, which clearly benefits all involved,' adds Dr. Yasuo Naruke, president and chief executive of TMC. 'With the concerns about litigation and arbitration removed, we look forward to renewing our collaboration with Western Digital, and accelerating TMC's growth to meet growing global demand for flash memory. Toshiba also remains on track to complete our transaction with the consortium led by Bain Capital by the end of March 2018. This will ensure that TMC has the resources it needs to continue to innovate and deliver for a fast-growing flash memory market, particularly in areas driven forward by advances in AI and IoT.'
Bain Capital, which has led the deal to acquire a third share in TMC, is also happy with the outcome. 'Bain Capital is pleased that Toshiba and Western Digital have resolved all outstanding legal disputes,' claims Bain's Yuji Sugimoto. 'The settlement represents the best possible outcome for all parties, clearing the way for the Bain Capital-led consortium to complete its acquisition of TMC as planned. We look forward to supporting TMC to achieve its strategic objectives while enhancing these important JVs with Western Digital.'
The settlement concluded, the sale of a chunk of TMC is expected to be finished early 2018.
March 12 2019 | 19:11