Toshiba Build Chip Plant Without Partner Western Digital

Toshiba to Build Chip Plant Without Partner Western Digital

Laptops, Technology

Toshiba is moving forward with plans to build a new memory chip plant without partner Western Digital, another escalation of the fight over the future of their joint venture.

The electronics maker will spend JPY 195 billion ($1.8 billion or roughly Rs. 11,275 crores) on construction of Fab 6 of its Yokkaichi semiconductor facility in western Japan, the Tokyo-based company said in a statement Thursday. Toshiba, which owns the land, buildings and the production know-how at the factory, has split investments in production equipment with SanDisk since the joint supply venture started in 2004. Western Digital acquired SanDisk last year.

Toshiba and Western Digital are locked in a legal fight over Toshiba’s plan to sell its share of the business to make up for multibillion-dollar losses in its nuclear power operations. Western Digital argues that it has a say in the sale, as well as right of first refusal. Further legal wrangling could delay the sale to a group of preferred bidders, putting Toshiba at risk of being delisted.

Western Digital, based in San Jose, California, needs to retain access to output from new Toshiba factories as improvements in manufacturing technology are one of the key determinants of success in the memory chip industry. Newer plants and equipment typically produce better semiconductors more cheaply.

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