8.06.2017

Toshiba to spend $1.8bn on new memory chip plant

Toshiba has announced that it is moving forward with its plans to build a new memory chip plant without its partner Western Digital. 


The company will spend $1.8 billion on the construction of Fab 6 of its new Yokkaichi semiconductor facility that will be located in western Japan.  Toshiba currently owns the land and buildings at the factor though it has divided investments in production equipment with SanDisk since the two companies began their joint venture in 2004. 


The fact that Western Digital acquired SanDisk early last year has led to an ongoing legal fight between it and Toshiba.    


Toshiba hopes to sell its share in the joint venture to recoup some of the multibillion-dollar losses from its nuclear power division.  However, now that Western Digital owns SanDisk, the company believes that it has a say in the sale as well as the right of first refusal. 


Kaori Hiraki, a spokesperson for Toshiba, shed some light on the current disagreement between the two companies, saying: 


“Toshiba has held discussions with SanDisk over several weeks, but could not arrive at an agreement because of the vast difference in opinions over capital spending.  We need to boost our production capability to meet increasing demand for Nand flash.” 


Western Digital expressed its disappointment with Toshiba’s plan to build a new plant in a statement, which read: 


“While we are disappointed by Toshiba’s announcement, the agreements governing the JVs give us the right to participate in investments.  That is exactly what we intend to do.” 


As both companies have failed to reach an agreement, the slowdown in the joint development project could have long lasting effects and give Samsung a huge advantage in the memory chip business. 


Image Credit: Toshiba

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