Toshiba and Western Digital Reach Global Settlement and Agree to Strengthen Flash Memory Collaboration
December 12 2017 - 5:00PM
Business Wire
Toshiba Corporation (TOKYO: 6502) (“Toshiba”), Toshiba Memory
Corporation (“TMC”) and Western Digital Corporation (NASDAQ: WDC)
(“Western Digital”) have entered into a global settlement agreement
to resolve their ongoing disputes in litigation and arbitration,
strengthen and extend their relationship, and enhance the mutual
commitment to their ongoing flash memory collaboration.
As part of this agreement, TMC and Western Digital will
participate jointly in future rounds of investment in Fab 6, the
state-of-the-art memory fabrication facility now under construction
at Yokkaichi, including the upcoming investment round announced by
Toshiba in October 2017. Fab 6 will be entirely devoted to the mass
production of BiCS FLASH™, the next-generation of 3D flash memory,
starting next year. TMC and Western Digital similarly intend to
enter into definitive agreements in due course under which Western
Digital will participate in the new flash wafer fabrication
facility which will be constructed in Iwate, Japan.
The parties will strengthen their flash memory collaboration by
extending the terms of their joint ventures. Flash Alliance will be
extended to December 31, 2029 and Flash Forward to December 31,
2027. Flash Partners was previously extended to December 31,
2029.
The parties’ agreement to resolve all outstanding disputes
ensures that all parties are aligned on Toshiba’s sale of TMC to
K.K. Pangea, a special purpose acquisition company formed and
controlled by a consortium led by Bain Capital Private Equity, LP
(“Bain Capital”). The parties have agreed on mutual protections for
their assets and confidential information in connection with the
sale of TMC, and on collaborating to ensure the future success of
TMC as a public company following an eventual IPO.
Commenting on the agreement reached today, Dr. Yasuo Naruke,
Senior Executive Vice President of Toshiba Corporation and
President and CEO of TMC said: “We are very pleased to have reached
this outcome, which clearly benefits all involved. With the
concerns about litigation and arbitration removed, we look forward
to renewing our collaboration with Western Digital, and
accelerating TMC’s growth to meet growing global demand for flash
memory. Toshiba also remains on track to complete our transaction
with the consortium led by Bain Capital by the end of March 2018.
This will ensure that TMC has the resources it needs to continue to
innovate and deliver for a fast-growing flash memory market,
particularly in areas driven forward by advances in AI and
IoT.”
Western Digital Chief Executive Officer Steve Milligan stated:
“Western Digital’s core priorities have always been to protect the
JVs and ensure their success and longevity, guarantee long-term
access to NAND supply, protect our interests in the JVs, and create
long-term value for our stakeholders. We are very pleased that
these agreements accomplish these critical goals, allow Toshiba to
achieve its objectives, and also enable us to continue delivering
on the power of our platform. I want to thank the hardworking teams
at Western Digital and TMC for the dedication they have exhibited
over the past several months, operating the JVs without
interruption, and we look forward to building upon the success of
our 17 year partnership.”
Yuji Sugimoto, Managing Director, Head of Japan for Bain Capital
said: “Bain Capital is pleased that Toshiba and Western Digital
have resolved all outstanding legal disputes. The settlement
represents the best possible outcome for all parties, clearing the
way for the Bain Capital-led consortium to complete its acquisition
of TMC as planned. We look forward to supporting TMC to achieve its
strategic objectives while enhancing these important JVs with
Western Digital.”
As part of the global settlement agreement, Toshiba, TMC and
Western Digital have agreed to withdraw all pending litigation and
arbitration actions.
About Toshiba
For over 140 years, Toshiba Corporation has contributed to a
sustainable future by applying innovative technologies to value
creation. Today, our business domains are centered on the essential
infrastructure that supports modern life and society. Guided by the
principles of The Basic Commitment of the Toshiba Group, “Committed
to People, Committed to the Future,” Toshiba promotes global
operations that contribute to realization of a world where
generations to come can live better lives.
To find out more about Toshiba, visit
www.toshiba.co.jp/worldwide/about/index.html
About Western Digital
Western Digital creates environments for data to thrive. The
company is driving the innovation needed to help customers capture,
preserve, access and transform an ever-increasing diversity of
data. Everywhere data lives, from advanced data centers to mobile
sensors to personal devices, our industry-leading solutions deliver
the possibilities of data. Western Digital® data-centric solutions
are marketed under the G-Technology™, HGST, SanDisk®, Tegile™,
Upthere™ and WD® brands. Financial and investor information is
available on the company's Investor Relations website at
investor.wdc.com.
Forward-Looking Statements
This news release contains certain forward-looking statements,
including statements concerning: the NAND flash memory joint
ventures; the global settlement agreement and the resolution of
outstanding legal disputes; investments in Fab 6; Western Digital’s
participation in TMC’s wafer fabrication facility to be constructed
in Iwate, Japan; the production of 3D flash memory and demand in
the flash memory market; Toshiba’s transaction with the consortium
led by Bain Capital; a potential initial public offering by TMC;
and expectations and objectives with respect to the NAND flash
memory joint ventures. There are a number of risks and
uncertainties that may cause these forward-looking statements to be
inaccurate including, among others: uncertainties with respect to
the NAND flash memory joint ventures; volatility in global economic
conditions; business conditions and growth in the storage
ecosystem; impact of competitive products and pricing; market
acceptance and cost of commodity materials and specialized product
components; actions by competitors; unexpected advances in
competing technologies; the development and introduction of
products based on new technologies and expansion into new data
storage markets; risks associated with acquisitions, mergers and
joint ventures; difficulties or delays in manufacturing; and other
risks and uncertainties listed in Western Digital’s filings with
the Securities and Exchange Commission (the "SEC"), including
Western Digital’s Form 10-Q filed with the SEC on Nov. 7, 2017, to
which your attention is directed. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date hereof, and Western Digital undertakes no obligation to
update these forward-looking statements to reflect subsequent
events or circumstances.
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version on businesswire.com: http://www.businesswire.com/news/home/20171212006367/en/
ToshibaMedia Contact:Kaori
Hiraki, +81-3-3457-2100media.relations@toshiba.co.jporToshiba
Memory CorporationKota YamajiBusiness Planning DivisionPhone:
+81-3-3457-3473semicon-NR-mailbox@ml.toshiba.co.jporWestern DigitalMedia Contact:Jim Pascoe,
408-717-6999jim.pascoe@wdc.comorInvestor Contact:Bob Blair,
949-672-7834robert.blair@wdc.comorJoele Frank, Wilkinson Brimmer
KatcherEric Brielmann / Jed Repko / Ed Trissel415-869-3950 /
212-355-4449wdcmedia@joelefrank.comorJapanMedia Contacts:Emi Hatano,
090-5765-9730emi.hatano@sandisk.comorAshton ConsultingJohn Sunley /
Brendan Jennings03 5425-7220 / 090-7416-0180 / 050
7576-6190WDC_JapanPR@ashton.jp
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