Kioxia and Western Digital are considering merging their flash memory production operations

Western Digital and Kioxia have partnered in the storage field for more than 20 years, during which time they jointly invested in the R&D and production of NAND flash memory. The respective product lines of the two parties also have a focus, in order to avoid competition between each other as much as possible.

Kioxia UFS flash memory
According to Bloomberg, Western Digital and Kioxia are negotiating to merge their NAND flash memory production business. This merger seems to be complicated because it not only involves Western Digital spinning off its NAND flash memory production and business unit, but also merges with Kioxia’s corresponding business, and the new company will not only be listed in the United States but also have a second listing in Japan. This process may take several months, and there are still many variables during the period.

The management of the new company is mainly from the Western Digital team. Due to the differences in the corporate cultures of the United States and Japan, there may be problems in future management. This is also one of the concerns of the two parties in this merger. In fact, in the summer of 2021, it was reported that Western Digital and Micron were interested in acquiring Kioxia. At that time, Kioxia’s valuation exceeded $20 billion. Although Western Digital squeezed out Micron and entered the substantive negotiation stage with Kioxia, after many rounds of negotiations, no final agreement was reached, and finally, nothing happened.

The relationship between Western Digital and Kioxia is already very close. The two parties jointly own two fabs in Japan, which together produce more NAND flash memory than any other manufacturer in the industry. The combined NAND flash memory market share of Western Digital and Kioxia is not low, accounting for nearly one-third of the market together, only slightly lower than Samsung.