Western Digital Seeks to Block Toshiba’s Sale of Memory-Chip Business

Signage for Toshiba Corporation is displayed atop the company’s headquarters in Tokyo, Japan, on Wednesday, May 13, 2015. Photographer: Akio Kon/Bloomberg

According to a Bloomberg News report, Western Digital has filed a lawsuit in a California court seeking to block Toshiba Corporation of Japan from selling its memory-chip business. Western Digital is Toshiba’s manufacturing partner in the memory-chip business, Toshiba Memory Corporation.

Western Digital is trying to block Toshiba from transferring joint ventures that they have together in preparation for a sale, it said in a statement Wednesday. Yesterday, Western Digital asked a San Francisco state court to keep the sale on hold while it pursues arbitration.

Toshiba is trying to raise cash in order to plug a multi-billion-dollar write-down following an unfortunate investment in the U.S.-based Westinghouse nuclear-power equipment business.

As we reported early this month, Toshiba stated that it intends to sell its memory-chip business.

Toshiba Memory Corporation is joint venture between Toshiba and SanDisk of Japan, with Toshiba owning the majority of Toshiba Memory Corporation. Toshiba split off TMC as a wholly owned subsidiary on April 1, 2017. It says “multiple parties” are interested in the memory business (both Apple and Foxconn are rumored to be seeking to purchase the business). Toshiba says its sale of the business won’t “in anyway” affect its agreements with SanDisk. However, it says that Western Digital Corporation, which became the parent company of SanDisk last year, has “objected to and subsequently interfered with the progress of the bid process.” It says Western Digital has contacted bidders and threatened legal action – actions Toshiba calls “unwarranted interference.”

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