Apple objects Western Digital move on Toshiba Memory

September 9, 2017

TOKYO- Apple Inc. is seeking to prevent Western Digital Corp. from taking control of Toshiba Memory Corp., despite its interest in teaming up with the US hard disk drive maker to acquire the crown jewel of troubled Japanese electronics and machinery giant Toshiba Corp. informed sources said.

Apple, keen to secure procurement of flash memory chips amid supply shortfalls, may contribute some 50 billion yen to a consortium that it would form with Western Digital to win the race for the Toshiba chip unit, according to the sources.

But, the US technology giant is concerned that the supply of Toshiba Memory products could be restricted if Western Digital takes the reins of its management.

Toshiba is working to reach an accord in negotiations with Western Digital, its memory business partner, on the sale of the chip unit. But they remain apart over the US company's future share of voting rights in the Toshiba unit, with Toshiba seen considering the will of Apple, a major customer.

Besides Western Digital, a Japanese-US-South Korean consortium, including South Korean chipmaker SK Hynix Inc., and Taiwan's Hon Hai Precision Industry Co. are approaching Apple to involve it in their respective sides.

Facing pressure from its main creditor banks, Toshiba aims to decide the buyer of its chip unit at a board meeting next Wednesday, while putting top priority on talks with the Western Digital camp.

Toshiba's board failed to reach a conclusion when it discussed a compromise plan put forward by Western Digital on Wednesday this week.

Within the Japanese company, there are persistent suspicions that Western Digital may be trying to leverage its current crisis to take over the prized chip unit.

Toshiba is running out of time to complete the sale of Toshiba Memory by the March 2018 end of fiscal 2017, after missing its initial goal of concluding the negotiations with Western Digital by the end of last month.

The company could be delisted from the Tokyo Stock Exchange unless it resolves its negative net worth by the fiscal-year end, by using proceeds from the planned sale. Jiji Press