Western Digital may be on the verge of merging parts of its business with Kioxia. Details of the proposed merger were shared by the business news organization Bloomberg.
Who are the companies involved?
Western Digital is a name familiar to most people. It’s a US-based company that specializes in computer hard disks, solid state drives and flash memory devices. Kioxia might be less well known, but it is a significant business in the world of computer memory. Kioxia was formerly a part of the Toshiba Corporation and is now a wholly-owned subsidiary of that company. While the business that became Kioxia was still part of Toshiba in the 1980s, it was credited with the invention of flash memory.
What will the merger mean?
Rumors suggest that the proposed deal merger would involve Western Digital’s NAND flash memory business being separated off and merged with Kioxia. NAND flash memory is used in SSDs and USB flash drives. Bloomberg’s report says that Western Digital shareholders would control more than half of the merged company. However, Kioxia’s executive team would be responsible for daily management.
Western Digital and Kioxia have been in discussion for several months. However, there hasn’t been a final agreement on the merger yet. While Bloomberg claims that its sources think a deal is close, it’s still possible that there might not be an agreement, even after all the discussions that have taken place.
What we think
Figures show that in the first quarter of this year, Kioxia had a 21.5% share of the NAND memory market, and Western Digital had 15.2%. However, the two companies’ biggest rival, Samsung, supplied 34% of the NAND memory during this same period. You can therefore see that by combining their businesses, Western Digital and Kioxia could overtake Samsung. Hopefully, that challenge to Samsung’s dominance will bring increased competition and better prices to consumers.