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Toshiba tells Western Digital to stop meddling with chip unit sale

Rob Horgan
Toshiba tells Western Digital to stop meddling with chip unit sale

Toshiba has told Western Digital not to interfere with its chip unit sale. The US company has been told to stop meddling after accusing Toshiba of breaching a joint venture agreement between the two companies.

Toshiba is attempting to offload its prized chip manufacturing business, after suffering huge losses due to its failed nuclear unit Westinghouse. However Western Digital – which is a partner in Toshiba’s main semiconductor plant, as well as a bidder for the chip unit as a whole – believes that Japanese firm is violating their contract by moving their joint venture rights to a newly formed unit. In a legal letter sent to Western Digital, Toshiba disputed all the claims and said it would pursue further action should Western Digital jeopardise a deal to sell its chip unit.

The letter read: “Western Digital's campaign constitutes intentional interference with Toshiba's prospective economic advantage and current contracts. It is improper, and it must stop.” Toshiba has also accused Western Digital of tailing to sign joint venture agreements. Giving them a deadline of May 15, Toshiba has threatened to suspend Western Digital staff from all of its unit’s facilities, networks and databases if the agreement is not signed.

Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 has led to massive scandal and loses for its parent company. Earlier this year Westinghouse filed for a Chapter 11 bankruptcy and Toshiba is attempting to split from the company. Since revealing its financial turmoil a number of investors have shown an interest in Toshiba’s technology businesses. Many suitors have tabled offers to invest in the firm’s profitable chip manufacturing business

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Tags: Toshiba, western digital, Vendors, joint venture

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