back to article No chips for you! Toshiba takes flash off the menu for WDC

The Toshiba vs. Western Digital flash foundry scrap has gone up a notch, with the former threatening to cut off the latter's future flash chip supplies. The scrap started when Toshiba decided to go it alone on a ¥195bn ($1.76bn) plant named "Fab 6" that will make 96-layer 3D NAND manufacturing equipment. Western Digital (WDC) …

  1. a_yank_lurker Silver badge

    Try a new approach

    Maybe how Southwest Airlines and Stevens Aviation settled a dispute might be appropriate - the "Malice in Dallas". The companies agreed to settle the dispute with an arm wrestling match between the CEOs with the loser making a donation to the charity of the winner.

    1. Charles 9 Silver badge

      Re: Try a new approach

      The problem with your idea is that in that case neither company was on the ropes. Toshiba figures it's fighting for its continued existence, meaning no holds are barred. That's why the fight with WDC is so ugly; Toshiba figures ANY move by WDC is just an inroad to a buyout, and Toshiba would prefer anyone else to buy them.

      1. Frederic Bloggs

        Re: Try a new approach

        Very delicately put. I would characterise more forcefully. WDC has a forked decision to make: either it buys Toshiba cheap - because it paid too much for SanDisk - thereby becoming a serious full scale player in the flash market, or it is sold to someone else. If that happens, that they scale up instead - and WDC whithers on SanDisk's diminishing niche flash and its own spinning rust businesses.

        And Toshiba don't want to sell to "anyone", as this includes Chinese or allied companies and Toshiba (or their government) don't want to transfer technology in that direction. Nobody "suitable" seems to have the money that Toshiba want. And notwithstanding all this, don't under estimate the fact that WDC think that they can get the flash business on the cheap - especially given the current political climate in the US.

        I suspect Toshiba would have sold if WDC had made a sensible offer. Now it could be "not WDC at any price".

        1. Charles 9 Silver badge

          Re: Try a new approach

          "And Toshiba don't want to sell to "anyone", as this includes Chinese or allied companies and Toshiba (or their government) don't want to transfer technology in that direction."

          Except an acceptable offer has already been made: by a consortium that has the blessing (and backing) of the Japanese government. If Toshiba were allowed to take the offer, everything can stay home and they can wind down more at peace. But WDC sued to block the offer because they want in.

    2. swschrad

      not going to matter soon

      as Toshiba is so hung out to dry that bankruptcy is likely.

  2. wrangler

    Seems to me the rights under the agreements should be clear. Either one of the companies is arguing in bad faith, or both of the companies did a terrible job of selecting their negotiating and legal teams for those agreements.

    1. Charles 9 Silver badge

      NOTHING'S clear if a litigant doesn't want it to be. Lawyers could argue the meanings of Newspeak words (read: as objective and concise as possible) if they felt it gave their client an edge. They'll argue no means yes, buy means sell, that the butter is blue, and say it with absolute confidence and a straight face.

  3. Anonymous Coward
    Anonymous Coward

    I wish to complain

    "Brexit negotiations will involve a boxing ring and months of non-stop combat."

    Please don't print misleading statements like this. It's is completely unfair to get peoples hopes up in such a cruel manner.

    1. Lloyd

      Re: I wish to complain

      I reckon the EU can use Conor McGregor and the UK can use Anthony Joshua.

      1. Spacedinvader

        Re: I wish to complain

        Lightweight v Heavyweight?

  4. conscience

    Without seeing the contracts it's hard to know for sure, but if I had to guess then I'd say WD is probably the one acting in bad faith here and that Toshiba is doing the right thing carrying on without them.

    If WD had had the funds on hand to buy Toshiba out there would be no dispute, but because WD were overstretched with the Sandisk acquisition at the time they had to resort to using their lawyers tactically instead.

    It's no secret that Toshiba need the cash, but what WD really need is no new cash-rich competitors entering the lucrative flash market and this is the real motivation behind why WD are so very desperate to block the sale of Toshiba's flash assets to anyone but themselves. Deliberately misinterpreting the terms of their contract with Toshiba may have been WD's only play at the time but it was always a risk that it would blow up in their faces like this.

    1. Lysenko

      From the very brief details in the article, it doesn't seem that there necessarily is any disagreement. All WD are asserting is that SanDisk has "priority" to participate and Toshiba are saying they are proceeding alone. Those positions do not appear to conflict. You cannot have "priority" unless there are others to be prior to. Ergo the question only arises if Toshiba solicit external investment (which they aren't).

      1. DryBones

        The analogy I'm envisioning is WD is an airline passenger having a tantrum about having priority boarding... And Toshiba is saying the cabin door is already closed and the aircraft is pushing away from the gate.

        1. Charles 9 Silver badge

          But WD is countering Toshiba slammed the door in their face...five minutes early, just because they were walking up, even though they hold a contract with both their names on it.

          1. Jamie Jones Silver badge

            dammit guys.. cars. cars. cars.

            we demand motoring analogies, not aeronautical ones!

            1. Charles 9 Silver badge

              Replace plane with train or bus. Happy now?

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