According to foreign media reports, news sources revealed that Toshiba and Western Digital Corporation (Western Digital Corp) agreed in principle to reconcile disputes between each other. Toshiba plans to sell its chip business for $18 billion and plans to finalize the final agreement next week.
Sources said that the Japanese company’s board of directors approved a dispute settlement framework on Wednesday.
Western Digital is a partner of Toshiba’s chip company, and it has been considered the biggest obstacle to the sale of the chip business to Bain Capital as the first consortium.
Two sources revealed that the settlement agreement under discussion required Western Digital to abandon the arbitration request for cease-to-sell in return for Toshiba’s agreement with Western Digital to invest in a new flash chip production line, which will start next year.
All sources refused to reveal their identity because they were not authorized to publish the news.
A Toshiba spokeswoman said the company is open to dispute settlements but will not disclose details of the discussions or details of the board meeting. The spokesman said: "It is not a fact that we have reached an agreement with Western Digital."
Western Digital declined to comment on the above news.
Toshiba’s US nuclear power business, Westinghouse, lost billions of dollars in debt and in order to repay the debt, Toshiba was forced to sell its chip business externally. The chip company is the world's second largest manufacturer of NAND chips.
A source stated that as part of the settlement plan, Toshiba and Western Digital will extend the existing agreement between the two companies for a chip joint venture located in Yokkaichi, central Japan (Yokkaichi). The current agreement will expire from 2021.
According to sources, Western Digital will also invest in a new chip factory that Toshiba will start construction in northern Japan next year.
Western Digital is one of the world's leading hard disk manufacturers. The company acquired SanDisk for $16 billion last year. SanDisk has been a Toshiba chip joint venture since 2000.
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