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June 16, 2017

Western Digital faces legal battle over sale of Toshiba NAND technology

Toshiba is eager to sell the business but legal disputes are on-going.

By Parisa Qurban

Toshiba is facing a major backlash from its joint manufacturing partner Western Digital, which is seeking injunction relief in the Superior Court of California.

The case has escalated as Western Digital, which jointly operates Toshiba’s main chip plant, is said to hold strong concerns over the way the Japanese government and other investors are affecting the auction process for its recent bid for Toshiba’s NAND chip technology. The company has also claimed that it is at a major disadvantage regarding contractual rights, leaving future investments open to highly risky situations.

Western Digital claims that there are several risk management matters that need to be addressed before opening up Toshiba’s technology to other joint third party ventures.

With lucrative deals from global tech leaders said to be lining up for the business, such as Apple, Google, and Foxconn, the controversial case is causing an array of difficulty regarding business matters for potential bidders. Toshiba is aiming to announce further details on which bidder may be successful later today.

This could have a significant effect on business growth, as access to the chips could potentially provide the next stages of computer storage technology.

Toshiba has already faced fierce opposition from the Japanese government which has indicated they may get involved in the bidding process to prevent Toshiba’s NAND technology being bought by international companies. This includes countries like China who are dominant competitors in relation to Japan concerning global trade and markets.

Toshiba is to go through several rigorous standards of global trading and anti-monopoly regulations for legal clearance regarding any of the joint ventures deals to come.

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In a bid that could be worth over $25bn, Toshiba is at an advantage of raising funds that would relieve previous debt from the U.S nuclear unit deal, where the company experienced drastic financial loss. The bid for NAND technology could provide greater opportunity for Toshiba to overturn its financial difficulties.

Toshiba CEO Satoshi Tsunakawa said at a news conference: “We will make efforts to convince bidders of the legitimacy of the chip-unit sale and wipe away their concerns.

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