https://www.bloomberg.com/news/articles/2017-08-04/toshiba-escalates-western-digital-fight-by-cutting-off-supply
The latest escalation of the fight
between the two centers on a new factory called Fab 6. Toshiba said it
will build the plant without any participation from its U.S. partner,
thereby cutting off Western Digital from chips made with the factory’s
new technology. Western Digital inherited its stake in the joint venture
when it bought SanDisk Corp.
“Toshiba is dismayed by Western
Digital’s pattern of exaggerating SanDisk’s rights under the relevant
agreements,” the Tokyo-based company said Friday in a statement.
“Despite claims to the contrary, Western Digital does not now possess
any legal ‘rights’ to participate in this phase of investment, which is
an important investment in the next generation of flash memory.”
Western Digital soon countered with a statement of its own, saying Toshiba’s position is wrong and affirming its rights.
“The
terms of the agreements and our related legal rights are clear, and we
remain confident that we will receive our share of any capacity from Fab
6,” the San Jose, California-based company said. “We are continuing our
constructive dialogue with Toshiba on this and other matters.”
The two companies are locked in a legal
fight over Toshiba’s plan to sell its share of the joint venture to
make up for multibillion-dollar losses in its nuclear power operations.
Western Digital argues that it has a say in the sale, as well as right
of first refusal. Further legal wrangling could delay the sale to a
group of preferred bidders, putting Toshiba at risk of being delisted.
Aspects of the dispute have spilled over into court.
Western Digital said a judge in San Francisco on Friday agreed to change
a temporary restraining order -- prohibiting Toshiba from blocking
Western Digital employees access to shared databases and other
joint-venture facilities -- into a preliminary injunction. The order
also requires Toshiba to continue to supply materials and sample wafers
to Western Digital in the U.S.
Western Digital needs to retain
access to output from new Toshiba factories as improvements in
manufacturing technology are one of the key determinants of success in
the memory chip industry. Newer plants and equipment typically produce
better semiconductors more cheaply.
Toshiba said the talks haven’t proved fruitful.
“Toshiba
provided an investment proposal to SanDisk earlier this year,” it said
in the statement. “Despite numerous meetings and negotiations, including
at the CEO to CEO level, Toshiba’s proposal was not accepted on the
timetable set out in the agreements. ”
Western Digital shares declined 4 percent Friday to close at $81.17 in New York. The stock has gained 19 percent this year.
Toshiba,
in its current partnership with Western Digital, is the second-largest
producer of flash memory chips used to store data in mobile devices.
Demand for that component is exploding as its use spreads to computers
and data centers. Samsung Electronics Co. is the largest manufacturer.
No comments:
Post a Comment