Did you miss the news on Western Digital yesterday? If so, pay close attention to the following: On August 3, Western Digital Corporation (NASDAQ:$WDC) announced that it still plans to invest in a brand new memory chip production line along with Toshiba Corp (TYO:$6502). This is significant news, as Toshiba – WDC’s joint venture partner – has said that it would make the investment on its own.
According to Toshiba, it plans to go ahead with the investment to build the Fab 6 production line in Yokkaichi without Western Digital. Why? It’s all because the two companies failed to reach an agreement about the investment. Elaborating further, Toshiba disclosed that it would invest 195 billion yen, or $1.76 billion, in the Fab 6 production line, which is up by about 15 billion yen from its original estimate, as it would be making the investment on its own.
In a statement, Western Digital said, “While we are disappointed by Toshiba’s announcement, the agreements governing the JVs give us the right to participate in investments in Fab 6 equipment along with Toshiba and that is exactly what we intend to do.”
Yesterday’s news, and the entire disagreement between the two companies, should be noted by anyone interested in computer hardware trading or computer hardware stocks, as it is bound to cause a domino effect of sorts.
Featured Image: twitter
