Toshiba, Western Digital chiefs to meet again on memory ops
Search for compromise continues as arbitration looms
TOKYO -- Western Digital CEO Steve Milligan will speak with Toshiba President Satoshi Tsunakawa in Japan on Wednesday to work toward resolving a dispute over the planned sale of the Japanese company's memory chip unit, The Nikkei has learned.
Toshiba and Western Digital jointly operate chip fabrication facilities in Yokkaichi, Mie Prefecture. The American hard-drive maker asserts that any transfer of the business without its consent would violate joint venture agreements. The Japanese conglomerate holds that Western Digital has no legal grounds to block the sale. A May 10 meeting between Milligan and Tsunakawa failed to break the deadlock.
On May 15, Western Digital filed a request for arbitration with the International Chamber of Commerce's International Court of Arbitration in a bid to halt the sale. "We believe legal action is now a necessary next step," Milligan said.
The move has rattled potential Toshiba Memory buyers. Toshiba, which is counting on proceeds from the sale to rebuild its battered finances after massive losses on U.S. nuclear operations, has been looking for an opportunity to talk with Western Digital about withdrawing the arbitration request.
Western Digital is considering making some concessions in order to retain the joint-operation structure at Yokkaichi and thus plans to look for potential common ground with Toshiba. If Milligan and Tsunakawa can reach a compromise, the sale could go on. But should the talks break down, Toshiba's plans to get back on its feet may be thrown into disarray.