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WDC wants in on Japan-backed consortium to buy Toshiba's chip biz

Legal headache still hangs over foundry joint venture agreement

WDC may have a way back into Toshiba's memory business auction although Toshiba has selected the Japanese state-backed INCJ consortium's ¥2tn ($18bn) bid group, which excluded WDC.

The bid group includes Bain Capital and SK Hynix, with Bain contributing ¥850bn ($7.7bn), making it nominally the largest cash contributor. Half of the Bain contribution will come from SK Hynix.

Immediately after Toshiba announced its preferred bid, WDC reiterated its view that, in selling the memory business, Toshiba was breaking their flash foundry joint venture agreement and an international arbitration court hearing on an injunctive relief request it made to halt the sale was scheduled for July 14.

Now we hear via Reuters that WD is talking to the trade ministry in Japan about participating. The INCJ-Bain-SK Hynix bid group has told Toshiba it needs to sort out the arbitration court brouhaha before it can actually buy the memory business.

Toshiba wants a formal memory business unit deal agreed and signed by June 28, and completed by March 31, 2018.


If WDC actually joins the INCJ group then surely it's game over for the competing Broadcom and Foxconn (Hon Hai) bidding consortia. The relationship between Toshiba and WDC may have been poisoned by WDC's legal moves and that will take time to go away.

There are interesting possibilities in WDC eventually working with flash competitor SK Hynix in the flash foundry business. ®


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