Toshiba and Western Digital said it had ended the dispute

Toshiba and Western Digital have completed a legal battle over chip unit sales. The two companies in Minato and San Jose said on Wednesday it has paved the way for an agreement on the sale of valuable multi-billion dollar chip business and will boost the joint commitment to collaboration on the ongoing flash memory.

Toshiba has been on the edge of trouble after the acquisition of Westinghouse nuclear energy company that lost billions of dollars. The company decided to sell its coveted chip business to a consortium led by Bain Capital in order to survive and avoid delisting from the stock market.

Western Digital who has been involved in joint production with Toshiba opposes selling to third parties without consent and launches a series of legal actions. The move triggered a backlash by Toshiba and the problem becomes more complicated.

On Wednesday, the two companies said in a statement that it had signed a global settlement agreement to settle disputes in litigation and arbitration, strengthen their ties, and increase joint commitment to ongoing flash memory collaboration.

They will jointly invest in a new chip manufacturing facility in central Japan in an initial commitment of about US$950 million through 2018. Western Digital may also invest in another planned plant in northern Japan. The Toshiba chip unit accounts for a quarter of the group's total annual revenue.