Toshiba on Thursday said it had stopped blocking Western Digital Corp from accessing databases at their memory chip joint venture (JV). The Japanese company added it would go ahead with the capital investment to build a new memory chip production line without joint venture partner Western Digital.
The California Court of Appeal on Wednesday ruled in favor of Western Digital, effectively asking Toshiba to give Western Digital's employees access to shared databases and chip samples at their JV in Japan.
The two are at loggerheads over a planned sale of Toshiba's chip unit, which is crucial for the firm to plug a multi-billion-dollar balance sheet hole left by the collapse of its U.S. nuclear business. Western Digital says any deal would require its consent.
Toshiba first shut out Western Digital in late June as tensions around the sale escalated. It temporarily suspended the lockout in July following a restraining order by the Superior Court of California, but reimplemented it a week later as its petition for an appeal was accepted.
Seperately, Toshiba said it has increased the amount of capital investment in the Fab 6 production line to at Yokkaichi 195 billion yen ($1.76 billion), up by 15 billion yen from its original estimate, because it is now going it alone.
Toshiba had previously shared investment in production lines at the Yokkaichi plant with SanDisk to maximize investment efficiency. Since the latter was taken over by Western Digital, however, the relationship has become more complicated.
Toshiba said it negotiated with SanDisk on a joint investment in the manufacturing equipment, but failed to reach agreement. Accordingly, the company will move forward with a unilateral investment in Phase-1 of Fab 6 that will equip the clean room to handle TMC's next-generation 96-layer BiCS FLASH memory, and allow TMC to meet demand growth in coming years.
However, Western Digital reafirmed its "commitment to the success of the three NAND flash-memory joint ventures" that SanDisk subsidiaries operate with Toshiba.
Western Digital stated:
"Western Digital is steadfast in its commitment to the success of the JVs. We have been in constructive dialogue with Toshiba over several weeks to come to mutually acceptable terms around our planned investment in the JVs, specifically in production equipment to be used at the new fab currently under construction in Yokkaichi, Fab 6. Those discussions are ongoing.
The JV operations are governed by agreements entered into by both partners. The agreements set out a framework for any investment by the partners in NAND manufacturing capacity - such as the investment in equipment for Fab 6. The agreements give us priority to participate in joint investments in Fab 6 equipment through the JVs, and that is exactly what we intend to do.
Our Board of Directors has authorized investments for our share of initial Fab 6 equipment. We remain committed to making continued significant investments in Yokkaichi and the surrounding communities to support the JVs and preserve Yokkaichi as the world's centerpiece of innovation in memory technology development and manufacturing."
The new production lines are being built to address a demand increase Toshiba foresees in 2018 and beyond.
Toshiba says the decision to move forward with a unilateral investment in Fab 6 does not impact production for the memory business, as Toshiba Memory produces the memory. Nor does it impact the various contracts related to development.