Kioxia, Western Digital Inch Closer To NAND Memory Merger: Report

Kioxia and Western Digital have been in merger talks for a couple of years but could now be close to actually completing a deal, potentially building what would then be the world’s largest NAND company with a market share greater than that of current leader Samsung Electronics.

Flash memory and SSD manufacturing giant Kioxia and flash and spinning disk developer Western Digital appear to be inching closer to a long-awaited merger.

Japan-based Kyodo News Friday reported that the two storage vendors are expected to agree as soon as late this month on a merger of their operations.

Kyodo, citing unnamed sources familiar with the matter, reported that the two companies are looking to set up a holding company that would merge their NAND flash memory production and list the new company on the Nasdaq stock exchange.

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Should the merger happen, the new combined company would have a NAND memory market share of about 35.4 percent, which would vault the company ahead of current market leader Samsung Electronics, which has a 34.3 percent share, Kyodo wrote.

Kyodo said just over 50 percent of the new company would be owned by Western Digital shareholders, with the remainder owned by Kioxia shareholders. This is in line with Bloomberg estimates last month that 50.5 percent of the merged business would be held by Western Digital, while 49.5 percent would be held by Kioxia.

Neither Kioxia nor Western Digital responded to a CRN request for further information by press time.

News of the increasingly advanced merger discussions come just three weeks after reports that Kioxia’s lenders have committed to refinancing $14 billion in loans to help merge Kioxia and Western Digital merge.

Kioxia, which until October 2019 was known as Toshiba Memory, is a world leader in flash memory and SSD technologies, including SLC NAND flash memory, NAND with integrated controllers, and 3-D BiCS FLASH technology, along with enterprise, data center and client SSDs.

Western Digital and Kioxia have a 20-year joint venture for developing flash memory at the Yokkaichi Plant, the largest semiconductor plant in Japan. The two companies in late March jointly unveiled their newest 3-D flash memory technology they said reduces costs with new processes and architecture.

Speculation about bringing Western Digital and Kioxia together to build a flash memory and SSD giant has been going on for over two years.

Western Digital and Kioxia were looking at a possible merger in August 2021, although those talks went nowhere.

Prior to that, Western Digital and Boise, Idaho-based DRAM and flash memory manufacturer Micron were looking at a possible acquisition of Kioxia in a deal that might value Kioxia at about $30 billion.

Western Digital in June 2022 said it was evaluating strategic and financial alternatives, including a full separation of its flash business. A month earlier, activist investment company Elliott Investment Management asked Western Digital to split into two companies, one focused on spinning hard drives and the other on flash drives as a way to maximize the value of both technology lines.

Western Digital and Kioxia revived talks about a merger in January 2023, according to Bloomberg. Discussions accelerated in June, according to Kyodo.