May 11, 2017

Toshiba and Western Digital dispute over flash memory division

The Japanese conglomerate Toshiba is undergoing an escalating dispute with their business partner, the American company Western Digital. The issue was raised due to the US company's claims of Toshiba's breaching of the joint venture contract. Toshiba, in turn, accused Western Digital of improper interference.

The Japanese conglomerate Toshiba is seen escalating their dispute with their business partner, the American computer data storage company Western Digital. The Tokyo-based company is now facing the risk of a bankruptcy due to the massive loss of around USD 6.3 billion in its nuclear power division. In line with that, Toshiba is currently trying to sell one of its "crown jewels", the NAND flash memory division, in order to shore up its finances and stay in the business. However, it seems like their plan to sell the computer chip business is being resisted by their US partner.

Western Digital was claiming that Toshiba's sale of the prized chip unit is a violation of the joint venture contract that they have signed as partners. Toshiba, in turn, tells the American company to back off and to stop interfering in the estimated 20 billion US dollars sale of its memory chip division. According to the letter written by the Japanese company, Western Digital "constitutes intentional interference with Toshiba's prospective economic advantage and current contracts. It is improper, and it must stop." The letter, where the accusation of "improper" interference to the Western Digital was written, were obtained by The Associated Press.

To recall, the NAND flash manufacturing plant in Japan is jointly operated by Western Digital and Toshiba where the chips produced in the plant makes up for 17 percent of the latter's sales. However, in a separate letter, the general manager of Toshiba's legal affairs claims that Western Digital has not yet signed a joint venture agreement with them regarding the matter. The letter further states that if the American company will fail to sign by May 15, its employees will be prevented from accessing all their facilities, networks, and databases.