Western Digital Plans to Sell Chip-Making Plant to Motorola

Western Digital Corp. announced a tentative agreement Monday to sell its semiconductor manufacturing plant to Motorola Inc. for about $115 million, a deal that comes just two weeks after a proposed sale of the Irvine facility to Rockwell International Corp. collapsed.

Schaumberg, Ill.-based Motorola intends to begin manufacturing computer chips at the plant by early 1994. The proposed agreement calls for it to supply Irvine-based Western Digital with semiconductors for at least two years after the sale.

The sale will allow Western Digital, a maker of computer disk drives, to retire at least half its $199 million in long-term bank and subordinated debt, officials said. The company reported a loss of $5.1 million, or 14 cents a share, for its latest fiscal quarter, which ended Sept. 25.

While Western Digital will no longer manufacture semiconductors, the company will continue to sell and design them, said Charles A. Haggerty, chairman, president and chief executive.

Western Digital’s stock was up 37.5 cents in New York Stock Exchange trading Monday, closing at a six-month high of $8.