Western Digital is attempting to block Toshiba from selling its chip business with a court injunction

Toshiba’s recent quest to sell off its NAND chip division has taken a dramatic new turn.

In a request filed with the Superior Court of California, Western Digital has asked a judge to grant the company an injunction against Toshiba to prevent the Japanese company from selling its NAND chip business without its consent.

Western Digital jointly operates Toshiba’s main chip plant.

Toshiba’s “attempts to circumvent our contractual rights have left us with no choice but to take this action,” said Steve Milligan, the CEO of Western Digital, in a prepared statement. “Left unchecked, Toshiba would pursue a course that clearly violates these rights.”

According to two unnamed sources interviewed by Reuters, Western Digital is concerned with how Toshiba is handling the sale of its chip business.

Despite the threat of a looming court battle, Toshiba reportedly plans to go ahead with the sale. According to Reuters, the company hopes to have a definitive agreement in place by June 28th. Toshiba’s rush to complete the sale stems from the fact the company wants to cover losses incurred by the recent bankruptcy of its Westinghouse nuclear unit.

Arbitration cases of the type Western Digital hopes to embroil Toshiba in typically take between 16 and 24 months to resolve. Were Toshiba to get caught up in a lengthy legal battle with Western Digital, it would likely be a significant blow for the company.

Toshiba has set a price tag of $18 billion USD (roughly $24.2 billion CAD) for its chip manufacturing business. The Japanese company is the second largest product of NAND semiconductors in the world. The division is highly sought after by multiple parties, including a group led by electronics contract manufacturing company Foxconn.

[source]Reuters[/source]