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© tom_schmucker dreamstime.com Business | September 21, 2017

WDC's Sandisk subsidiaries initiate new arbitration proceedings against Toshiba

Western Digital says that several of its SanDisk subsidiaries have filed an additional Request for Arbitration with the ICC International Court of Arbitration related to three NAND flash-memory JVs operated with Toshiba.
On Aug 3, 2017, Toshiba announced that it would unilaterally invest in manufacturing equipment for the Fab 6 clean room at the JV operations in Yokkaichi, Japan. The arbitration demand seeks, among other things, a permanent injunction preventing Toshiba from making unilateral investments in manufacturing equipment for Fab 6 without first giving SanDisk the opportunity to make a comparable investment in expansions and conversions of JV capacity for BiCS 3D NAND flash memory.

Western Digital commented:

It is unfortunate that SanDisk is forced to initiate binding arbitration to remedy Toshiba's retaliatory breach of the JV agreement entered into by both SanDisk and Toshiba.

The terms of the agreement and our related legal rights are clear. The agreement gives SanDisk the right to participate in expansions and conversions of manufacturing capacity for BiCS 3D NAND flash memory products through joint investments in Fab 6 equipment. Toshiba has improperly denied SanDisk its rights to joint investment by unilaterally investing in manufacturing equipment at Fab 6.

We believe that our NAND supply requirements through calendar 2018 are secure, with no meaningful supply from Fab 6 anticipated until calendar year 2019.

We will continue to act in the best interests of our stakeholders, protecting SanDisk's interests in the JVs and consent rights through both our request for injunctive relief and the arbitration process.
The arbitration requests filed by Western Digital's SanDisk subsidiaries on May 14, 2017, and July 5, 2017, continue to move forward in the ICC International Court of Arbitration.


Toshiba has released a comment regarding there new arbitration proceedings saying that the company “is disappointed by Western Digital’s initiation of additional arbitration at this important time for the parties’ collaboration.”

Toshiba goes on saying that production at Fab 6 will be entirely devoted to BiCS FLASHTM. Phase-1 of the fab is scheduled for completion in summer 2018, and will be a unilateral investment by Toshiba following SanDisk’s unwillingness to agree to reasonable commercial terms.

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October 16 2017 2:56 PM V8.8.6-1