Western Digital, Kioxia Negotiate Over Building Chip Giant

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  • Reuters reports that Western Digital Corp WDC is in advanced discussions regarding a potential $20 billion stock merger with Japanese chipmaker and partner Kioxia to tap the 5G expansion and pandemic driven remote working.
  • However, the Wall Street Journal reported that Kioxia could also ditch the merger and opt for an IPO.
  • It could create a NAND memory giant to Korean rival  Samsung Electronics Co Ltd SSNLF, which announced a significant chip building initiative.
  • The companies could reach an agreement as early as mid-September, and Western Digital CEO David Goeckeler would run the combined firm.
  • Samsung dominates with over a third of the NAND market, as per TrendForce. Kioxia has a nearly 19% share and Western Digital 15%.
  • Earlier this year, Korean chipmaker SK Hynix Inc HXSCL won the European Commission approval for acquiring Intel Corp’s INTC Nand storage unit. In contrast, Britain reserves anticompetitive concern against NVIDIA Corp NVDA-Arm Ltd deal.
  • Other successful chipmaking deals include Advanced Micro Devices Inc - Xilinx Inc XLNX, and  Analog Devices Inc ADI -  Maxim Integrated Products Inc MXIM.
  • Price Action: WDC shares are down by 1.85% at $64.31 on the last check Thursday.
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