Western Digital to Lend $12 Million to Tandon

Western Digital Corp., an Irvine-based manufacturer of computer components, has agreed to lend Tandon Corp. of Chatsworth $12 million as part of a joint venture to develop a new generation of computer disk drives.

Ranjit Sitlani, Tandon’s executive vice president, said terms of the loan are still being negotiated. He said the loan, which Tandon can use for varied corporate purposes, would be secured by Tandon disk drives and technology.

Tandon has been strapped for cash as a result of its expansion last year into the personal computer business. The company has previously sought loans from business partners. Last year, it borrowed $4 million from Xerox, which Xerox will convert into 1.4 million shares of Tandon common stock.

Western Digital makes circuit boards and other components that control computer disk drives, video displays and core logic functions.

Tandon and Western Digital said they plan to build so-called “smart” disk drives that combine a disk drive and its control circuitry in a single unit.