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posted by martyb on Tuesday May 30 2017, @09:14AM   Printer-friendly
from the boom-bust-BOOM! dept.

Tech giant Samsung Electronics Co Ltd said on Monday it is considering adding NAND memory chip production capacity at its manufacturing base in China amid an industry-wide boom that will likely fuel record sales for memory suppliers.

Samsung, the world's biggest memory chip maker by sales, has already invested $7 billion in the Xi'an facility to make 3D NAND memory chips. The chips are used for high-end data storage products on electronic devices such as smartphones, personal computers and data servers, and their prices have surged in recent months as suppliers struggle to keep up with demand.

[...] Researcher IHS expects this year's memory industry revenue to jump 32 percent to a record $104 billion.

Recently, Western Digital sought to intervene in the sale of Toshiba's memory business, rather than purchase the division itself. Originally valued at $18 billion, Foxconn has bid $27 billion and Broadcom bid $28 billion.

Western Digital, through its SanDisk subsidiary, is seeking arbitration to prevent Toshiba from selling off its stake in their flash memory joint venture without the consent of Western Digital. [...] Western Digital does have leverage in their preexisting relationship with Toshiba as co-owner of their flash memory joint venture. Western Digital is alleging that Toshiba is required to obtain Western Digital's consent before spinning off or selling Toshiba Memory, and that Toshiba's actions so far have violated their agreements with Western Digital. Western Digital has initiated arbitration proceedings against Toshiba, seeking to block further action without Western Digital's consent and to reverse the Toshiba Memory spin-off.

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  • (Score: 2) by frojack on Tuesday May 30 2017, @08:06PM

    by frojack (1554) Subscriber Badge on Tuesday May 30 2017, @08:06PM (#517866) Journal

    Western Digital does have leverage in their preexisting relationship with Toshiba as co-owner of their flash memory joint venture.

    Typically these things have first right of refusal built in, or some other method of dissolving the agreement. (You always plan for failure of joint ventures - success takes care of itself).

    As long as it is a joint venture of equal ownership it doesn't matter what a wiling buyer pays, Western Digital would still own its half (which by definition increased in value the minute the other half sells). They still would have gotten their half at a bargain.

    So I have to assume WD doesn't quite own half, OR they didn't do their due diligence when setting up this arrangement. Or, on the other hand they owned more than half, and they had too much control and were bleeding Toshiba dry.

    Trying to keep an unwilling partner in a joint venture is a fools errand. And there must be some significant unspoken nastyness going on here.

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