Western Digital Sale of Network Unit Gets Final OK : * Computers: The $33-million deal is thought to be crucial to company efforts to increase cash flow and meet loan agreements.

Western Digital Corp., in an effort to raise some badly needed cash, said it has reached a final agreement to sell its computer network business to New York-based Standard Microsystems Corp. for $33 million.

In another development, Western Digital said British computer maker Amstrad plc has filed a $141-million lawsuit against the Irvine firm for allegedly supplying faulty computer disk drives in 1988 and 1989.

Western Digital officials said Amstrad’s charges are unfounded and that the company is considering filing a countersuit. The Amstrad suit was filed Monday in federal court in Santa Ana.

The sale of the network business, which was announced as a tentative agreement in March, is expected to be completed on Sept. 27. The unit had annual sales of $115 million.

Analysts said the sale is crucial to Western Digital’s efforts to improve its cash flow and to ensure that it can meet the terms of restructured loan agreements with its banks.

“Getting the $33 million in cash will be good news for them because they need the money,” said Lawrence Borgman, an analyst at Dillon Read & Co. in New York. “This is a difficult quarter for them because of heavy (price cutting).”

Western Digital lost $26.5 million on revenue of $253.3 million for its fiscal fourth quarter ended June 30. In August, the company renegotiated its long-term debt with its lenders.

Western Digital, which makes personal computer components, said the network unit was not essential to its business strategy.

The company wants to become a supplier of products based on semiconductor technology, the tiny chips that serve as the engines of PCs. But it no longer wants to mount those chips on circuit boards, which is becoming an increasingly competitive business. The networking unit was mostly based on circuit board technology.

In addition to the cash payment, Western Digital will retain its accounts receivable for the networking unit, its existing product inventory and accounts payable at the sale’s closing. Standard Microsystems, based in Hauppage, N.Y., will continue to work with Western Digital, including developing a new networking chip for the Irvine company. Analysts estimate those terms are worth $20 million to $30 million for Western Digital.

The Amstrad lawsuit claims that a now-obsolete line of Western Digital disk drives failed to meet the quality of Amstrad’s previous supplier, Tandon Corp., which Western Digital acquired in March, 1989.

Amstrad filed a similar lawsuit Monday against Seagate Technology Inc., a hard disk drive manufacturer based in Scotts Valley, Calif.

Western Digital said Amstrad waited 18 months after delivery of the disk drives to notify it that the products did not meet quality requirements.

Western Digital stock fell 12.5 cents to $2.875 per share, a 52-week low, in New York Stock Exchange trading Tuesday.