(Bloomberg) -- Toshiba Corp. is moving forward with plans to build a new memory chip plant without partner Western Digital Corp., another escalation of the fight over the future of their joint venture.

The electronics maker will spend 195 billion yen ($1.8 billion) on construction of Fab 6 of its Yokkaichi semiconductor facility in western Japan, the Tokyo-based company said in a statement Thursday. Toshiba, which owns the land, buildings and the production know-how at the factory, has split investments in production equipment with SanDisk Corp. since the joint supply venture started in 2004. Western Digital acquired SanDisk last year.

Toshiba and Western Digital are locked in a legal fight over Toshiba’s plan to sell its share of the business to make up for multibillion-dollar losses in its nuclear power operations. Western Digital argues that it has a say in the sale, as well as right of first refusal. Further legal wrangling could delay the sale to a group of preferred bidders, putting Toshiba at risk of being delisted.

Western Digital, based in San Jose, California, needs to retain access to output from new Toshiba factories as improvements in manufacturing technology are one of the key determinants of success in the memory chip industry. Newer plants and equipment typically produce better semiconductors more cheaply.

“If you keep going down the path and you play to its finality it may not be a good path for either company,” said Amit Daryanani, an analyst at RBC Capital. “The hope would be cooler heads prevail.”

Toshiba said the two sides are far apart on the new project.

“Toshiba has held discussions with SanDisk over several weeks, but could not arrive at an agreement because of the vast difference in opinions over capital spending,” said Kaori Hiraki, a spokeswoman for Toshiba. “We need to boost our production capability to meet increasing demand for Nand flash.”

Toshiba said it is spending 15 billion yen more than originally planned, but going it alone won’t impact production or development. Installation of fabrication equipment to produce so-called 3D Nand flash will begin in December 2017 and output will ramp up to 90 percent of capacity in the fiscal year ending March 2019, Toshiba said.

“While we are disappointed by Toshiba’s announcement, the agreements governing the JVs give us the right to participate in investments,” Western Digital said in a statement. “That is exactly what we intend to do.”

Shares of Toshiba closed 0.8 percent lower in Tokyo Thursday, paring losses prior to the announcement. The stock is down 8.5 percent this year. Western Digital’s stock was little changed at $84.53 in New York trading.

Toshiba clinched a preliminary agreement in June to sell its memory chip unit to a group led by the Innovation Network Corp. of Japan, Bain Capital and other investors. The consortium of preferred bidders is offering 2.1 trillion yen, people with knowledge of the matter have said.

Western Digital in May invoked an arbitration clause in the business agreement, seeking to block Toshiba’s transfer of ownership of the unit to a separate legal entity in preparation for a sale. Toshiba, which has since reversed that transfer, had its lawyers send a letter demanding that the U.S. company stop its “harassment” as it seeks to sell the business.

The legal spat is threatening the very existence of the venture, according to people familiar with the matter. The breakup would increase the financial burden on Toshiba and reduce cost advantages that come with scale. It would also deprive Western Digital of access to advanced chips necessary to compete in the storage business.

If Toshiba is forced through arbitration to sell its stake in their venture to Western Digital, the move could trigger the dissolution of their legal partnership, according to regulatory filings. That would cancel the supply agreement under which the U.S. company gets chips and make it the owner of only some equipment, according to people close to Toshiba and the terms of their relationship. That equipment would be useless without other machinery and the plant itself, which would remain Toshiba’s property. Production of memory chips for Western Digital would stop, the people said.

“Any slowdown of the joint development projects -- even if temporary -- could result in severe and lasting consequences,” Mark Long, chief financial officer of Western Digital, told a California court last month. 

The largest maker of flash memory chips, Samsung Electronics Co., is currently completing what it says is the world’s largest chip plant. Underlining the speed at which Toshiba needs to move, Samsung’s plant is already in production, even before construction is complete.