Kioxia would merge with Western Digital flash memory business spinoff

The collaborative partnership between Western Digital and Kioxia in the storage sector has spanned over two decades, involving mutual investment in the research and development, as well as the production of NAND flash memory. Each party maintains its own product lines with distinct emphases, strategically designed to minimize competition between them. Reports have previously circulated suggesting negotiations concerning the consolidation of NAND flash memory production.

According to Bloomberg, following several months of negotiation, Western Digital and Kioxia are on the brink of finalizing an agreement. This includes Western Digital spinning off its NAND flash memory business to merge it with Kioxia, though the specifics of this arrangement remain unclear.

Rumor has it that the original shareholders of Western Digital will hold slightly over half the control of the newly formed corporation, while the managerial team, primarily composed of original Kioxia personnel, will be responsible for day-to-day operations. Despite advanced stages of negotiation, the final agreement is yet to be reached, and the timeline could be subject to change. The future company will adopt a dual board of directors system, establishing its headquarters in Japan, with its initial listing on NASDAQ in New York, followed by a subsequent listing in Tokyo. Additionally, Bain Capital, a private equity firm and major investor in Kioxia, is expected to receive a special dividend.

Data from TrendForce indicates that in the first quarter of 2023, Kioxia held a 21.5% market share, Western Digital 15.2%, and Samsung 34%. Consequently, the merger of Kioxia and Western Digital would elevate their combined market share to 36.7%, superseding Samsung to become the preeminent NAND flash memory supplier.