Battle-weary Tosh, WDC mull peace treaty to end war over flash chip fab

Settlement reportedly on the cards

Toshiba and Western Digital may be about to settle their long-running legal dispute over Tosh's sale of its interest in a flash fab joint venture, held by the two, to a Bain-led consortium that includes WDC competitors.

Tosh wanted to sell its interest after near-catastrophic losses were discovered in its Westinghouse US nuke power plant building business. WDC said, as per the joint-venture agreement, it had to authorize any sale of Tosh's stake, and it refused to give the green light. Toshiba said the contract's fine print didn't specify that, and therefore it could flog its stake to whatever outfit it liked, and did, for 2 trillion yen ($18bn).

Lawyers were activated, with WDC taking Tosh to the International Arbitration Court and Tosh taking WDC to a Tokyo court, where hearings have recently started.

Ohm-em-gee: US nuke plant project goes dark after money meltdown

READ MORE

Bloomberg and Reuters are now reporting a settlement is near. A niggle still to be ironed out concerns the influence of WDC competitor SK Hynix in the flash fab's operation: SK Hynix is part of the Bain-led consortium, which means it will potentially get a say in how the joint-venture's fab will be run. If this can be sorted out, WDC will drop its deal-blocking tactics.

WDC and Tosh lawyers have been appearing in a Tokyo court arguing their respective cases about what they can and can't do with their JV interests. Tosh is seeking damages of 120bn yen ($1.1bn) from WDC for the harm it has done to its business.

WDC's lawyers said the case should be dismissed because the matter behind it is being dealt with by the International Court of Arbitration.

Will a settlement happen? We watch and wait. If a settlement happens, it's likely WDC will be seen as a loser because it will be agreeing to work with partners it previously opposed. ®

Sponsored: Minds Mastering Machines - Call for papers now open


Biting the hand that feeds IT © 1998–2018