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WDC Falls 4%: No Rights to Invest, Says Toshiba; Yes We have, Says Western

Shares of hard disk drive and memory-chip maker Western Digital (WDC) are down $3.18, or almost 4%, at $81.33, after the latest dust-up in the company’s battle with its joint-venture partner, Toshiba (6502JP).

And, to judge from one comment this afternoon, defenders of Western's stock are slightly more ill-at-ease with this turn in the dispute.

You’ll recall that yesterday, Toshiba said it would move ahead with an investment to develop equipment to make NAND flash chips in a factory known as “Fab 6" that has been the source of the parts underlying the joint venture with Western.

Western countered that negotiations are ongoing for Western to take a stake in that investment.

In response, Toshiba this afternoon issued a statement saying said Western does not, in fact, have any right to invest in the factory:

Toshiba is dismayed by Western Digital’s pattern of exaggerating SanDisk’s rights under the relevant agreements. Despite claims to the contrary, Western Digital does not now possess any legal “rights” to participate in this phase of investment, which is an important investment in the next generation of flash memory.

As has been widely reported, Toshiba and SanDisk have been in negotiations regarding Fab 6 for several months. Toshiba provided an investment proposal to SanDisk earlier this year...


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