Western Digital ready to offer funds to help Toshiba
CEO declares his desire to continue partnership in letter to Nikkei, others
TOKYO -- Western Digital, opposing the sale of Toshiba's memory unit, has offered funds to bail out the struggling Japanese technology company.
In a letter to The Nikkei and other media, Western Digital CEO Steve Milligan said, "Our solution would provide Toshiba and its creditors with the necessary financial resources to emerge from the current crisis."
Regarding the plant in Yokkaichi, in western Japan's Mie Prefecture, which Toshiba operates in cooperation with the American computer data storage company, Milligan said: "Our shared fab complex at Yokkaichi would remain the centerpiece of our memory development and manufacturing for the long term as well."
"As long-term partners and supporters of Toshiba, it has been difficult for us at Western Digital to watch this great company go through this period of profound financial and strategic challenges.
"We are focused on helping to develop a solution that is consistent with our shared values and ensures the long-term interests of all of the stakeholders are protected, from employees to customers as well as shareholders and creditors," he said.
Western Digital has acquired Hitachi's hard-disk drive business and expanded its share of the market through a fusion of cutting-edge Japanese and U.S. technologies.
Referring to the joint memory business between Toshiba and Western Digital, Milligan said, "Our partnership started in 1999 and brought together the strong process and manufacturing capabilities of Japan with the technological innovation that is a hallmark of Silicon Valley.
"We believe that due to the trust we have built and the challenges we have jointly overcome, we can drive the innovation agenda in semiconductors, and face the uncertainties of the evolving geopolitical and macroeconomic landscape from a position of strength, together."
Western Digital purchased SanDisk, a U.S. flash memory maker, forming a partnership with Toshiba, for $17 billion as recently as May 2015. The purchase price was higher than Western Digital's annual sales, forcing the company to finance the deal with funds on hands and loans.
Some analysts say that as a result, Western Digital does not have the financial resources to help Toshiba pull out of its current financial crisis.
As Western Digital has sounded out U.S. investment fund Kohlberg Kravis and Roberts and other concerns about collaboration, negotiations between these parties are expected to open an new chapter in Toshiba's saga.