Toshiba to Build Chip Plant Without Partner Western Digital

Toshiba to Build Chip Plant Without Partner Western Digital
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Toshiba is moving forward with plans to build a new memory chip plant without venture partner  Western Digital, according to Bloomberg.

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

Toshiba and Western Digital are locked in an escalating 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 is arguing 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.

“Toshiba has held discussions with SanDisk over several weeks, but could not arrive at an agreement because of the vast difference in opinions over capital spending,“ said Kaori Hiraki, a spokeswoman for Toshiba. “We need to boost our production capability to meet increasing demand for Nand flash.“

Toshiba said it is spending 15 billion yen more than originally planned, but going it alone will not impact production or development. Installation of fabrication equipment to produce so-called 3D NAND flash will begin in December 2017 and output will ramp up to 90 percent of capacity in the fiscal year ending March 2019, Toshiba said.

“While we are disappointed by Toshiba’s announcement, the agreements governing the JVs give us the right to participate in investments,“ Western Digital said in a statement. “That is exactly what we intend to do.“