Toshiba warns Western Digital not to interfere in chip biz sale
Dispute heats up as Japanese tech giant threatens to shut out workers
TOKYO -- Toshiba is well within its rights to sell its memory operations, the Japanese conglomerate has told business partner Western Digital in response to efforts by the hard-drive supplier to block the auction, it was learned Tuesday.
Western Digital acquired fellow U.S. company SanDisk in May 2016, inheriting a memory production joint venture with Toshiba as part of the deal. The terms of the venture agreement restrict the sale of the business, Western Digital told Toshiba by letter last month, requesting exclusive negotiating rights.
Toshiba responded in letters dated May 3 that it had not signed any joint-venture contract with Western Digital at the time of the SanDisk purchase. It also warned that if Western Digital does not stop interfering in the auction by next Monday, Western Digital technicians will be denied access to the jointly run Yokkaichi chipmaking facility in Mie Prefecture.
Western Digital, South Korea's SK Hynix, Broadcom of the U.S. and Taiwan's Hon Hai Precision Industry remain in the running for the memory operations. The public-private Innovation Network Corp. of Japan is collaborating with American private-equity giant Kohlberg Kravis Roberts in a joint bid as well.