Toshiba sues WD for frustrating memory division sales
Toshiba has filed a case against Western Digital in a Tokyo court. Toshiba argues that WD has engaged in unfair competition and that the US company would frustrate the sale of the nand memory vision.
Toshiba is claiming damages from Western Digital in the amount of EUR 942 million. According to Toshiba, WD has constantly interfered with the bidding process. According to Toshiba, WD deliberately misrepresented the level of approval rights WD would have under the joint venture between Toshiba and Western Digital’s subsidiary SanDisk. This would have been done by WD to complicate the sale of the memory division. According to Toshiba, no approval from WD is required for the sale.
WD also allegedly improperly obtained trade secrets from Toshiba by relocating SanDisk employees to WD. These employees would have access to sensitive classified information belonging to Toshiba. Toshiba says it sees no option other than to block Western Digital’s ability to access this information. Toshiba is likely to prevent this by blocking WD employees from accessing certain facilities, such as the Yokkaichi chip factory in Japan.
Toshiba has also said that no final agreement has yet been reached on the acquisition of the nand memory division. Negotiations with the consortium, consisting of a Japanese government fund, the Japanese development bank and the American private equity firm Bain Capita, are still ongoing.
The parties were expected to conclude the talks on Wednesday. As a reason for not meeting this deadline, Toshiba states that it needs more time because the consortium consists of several parties. Toshiba will not give a new date for when it believes the negotiations will be complete.
The finalization of these negotiations may also have been delayed by the conflict with WD. Last month, Western Digital went to an arbitration board to prevent Toshiba from selling its chip division. According to WD, Toshiba has transferred its nand manufacturing business to Toshiba Memory without seeking SanDisk approval. WD also recently filed a lawsuit in a California court to prevent the sale of its chip division.
Toshiba spun off its nand memory production on April 1 into a separate company called Toshiba Memory and is selling this business as it is in financial turmoil after a series of financial setbacks. After Samsung, Toshiba is currently the world’s largest manufacturer of nand memory.