The Toshiba Agreements
As previously announced, WD will be divesting certain assets to Toshiba, including manufacturing equipment and intellectual property, to comply with regulatory requirements that will enable Toshiba to enter the 3.5‐inch desktop and consumer electronics market segments and expands their capacity in 3.5‐inch near‐line enterprise. The divestiture will include the product IP for the 1, 2 and 3 platter 3.5‐inch 1TB/platter HGST platforms, associated production equipment and a limited set of WD test equipment.
WD has agreed to contract manufacture the transferred products for Toshiba for a period of time to allow for the orderly transfer of the production lines to Toshiba or a designated contract manufacturer, enabling Toshiba to compete immediately in the 3.5‐inch desktop/CE HDD market. It is anticipated that the manufacturing transfer can be complete within 6 to 12 months. WD and Toshiba also entered into a supply agreement for heads and media
HGST will continue to build and support all its 3.5‐inch desktop and CE products until closure of the divestiture. Post divestiture, HGST will continue to make other existing 3.5 inch desktop and CE products until the end of their production lives to meet customer demand and warranty obligations (i.e. 500GB and 667GB per platter products).