Toshiba and Western Digital could end spat by next week

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The long running dispute between Toshiba and Western Digital over the Japanese firm's potential sale of its $18bn chip unit could come to an end as early as next week being as both companies are now working towards a final agreement. 

The two companies are partners in Toshiba's main semiconductor plant and because of this it was feared that Western Digital would try to block the sale of the business to a consortium led by Bain Capital

The settlement that currently under discussion calls for Western Digital to drop its arbitration claims which seek to prevent the sale of the chip unit in exchange for Toshiba allowing it to invest in a new advanced flash memory production line at the beginning of next year. 

The Japanese firm had reluctantly put its chip business up for sale after its US nuclear power unit, Westinghouse went bankrupt.  By selling the unit, Toshiba would be able to cover the billions of dollars in liabilities that occurred after the energy unit's bankruptcy. 

If the deal with Bain Capital goes through, Toshiba would reinvest in its chip unit, which is the world's second largest producer of NAND chips, with the parts maker Hoya Corp.  The Japanese government is hoping for this outcome since it would allow national firms to hold more than 50 per cent of the business. 

Image Credit: Toshiba