Toshiba moves back some chip unit assets
TOKYO: Western Digital said yesterday it is still seeking arbitration in a dispute with Toshiba Corp over the auction of its prized chip unit, arguing that a transfer of assets by the Japanese firm had not resolved what it calls a serious breach of contract.
The two are at loggerheads over the sale of the unit — the world’s second-largest producer of NAND chips — that the Japanese conglomerate values at at least US$18 billion (RM77.2 billion). Toshiba is depending on the auction to cover billions of dollars in cost overruns at its now bankrupt United States nuclear unit Westinghouse.
Western Digital, which jointly operates Toshiba’s main chip plant located in Yokkaichi, western Japan, has argued that the unit cannot be sold without its consent and has demanded exclusive negotiating rights.
In a letter to the US firm’s lawyers dated May 31, Toshiba’s lawyers said joint venture interests had been moved back to the parent company from the chip unit, adding that this addressed Western Digital’s concerns and put the dispute to rest.
The assets transferred back were, however, financing vehicles for manufacturing equipment and account for less than five per cent of Toshiba’s memory chip business. Western Digital countered that nothing had been resolved.
A separate source familiar with the matter said yesterday Western Digital was considering fresh investment to build another flash memory chip plant in Japan to show its commitment to the country and that chief executive officer Stephen Milligan would visit Japan next week for talks with Toshiba to resolve the spat.
The two firms operate four memory chip plants in Yokkaichi through their joint ventures. Their fifth plant is currently under construction.
The amount of investment and a timeline for the plant’s construction had not been decided, said the source. Reuters