Western Digital seeks ban to prevent Toshiba from selling its chip business to...

[TechWeb Report] September 27 news, according to Reuters, Western Digital said on Tuesday local time that it will seek a ban to prevent Toshiba from selling its semiconductor business to its competitors.

Last week, Toshiba decided to sell the chip unit to a consortium led by Bain Capital and Korean chip maker SK Hynix.

The search for a ban is the latest legal action by Western Digital to jointly invest in Toshiba’s main chip factory.

However, so far, the $18 billion agreement reached by Toshiba and the Bain Foundation has not yet been signed. Toshiba informed its major lending bank this week that Apple, one of its members and an important customer, has not yet agreed on the key terms.

Western Digital is seeking a ban from the International Chamber of Commerce's Court of Arbitration (ICC). Earlier this year, Western Digital filed a lawsuit against Toshiba and stated that it was impossible to complete any transaction related to Toshiba's chip business without obtaining its consent.

According to informed sources, an arbitration panel composed of three arbitrators will be formed earlier this week and will make a decision on this ban later this year. The final ruling on the dispute is expected to be made before 2019.

For Toshiba, it needs to sign the chip business sale agreement as soon as possible, because it needs to raise billions of dollars in funds to make up for the huge debts that its bankruptcy US nuclear subsidiary Westinghouse Electric brings, otherwise it may be held by Tokyo Securities. The exchange delisted.

Even if Toshiba manages to reach an agreement with the Bain Group immediately, it will still require careful planning because the regulatory review usually takes at least six months.

On Wednesday, Western Digital submitted a new arbitration request to prevent Toshiba from investing in a new chip factory in Yokkaichi, Japan, unless Western Digital's subsidiary Sandisk was also allowed to participate in the investment.