Western Digital and Kioxia will launch a major collaboration in the NAND memory space, with the ultimate goal of creating the world's largest NAND flash memory manufacturer.
The Nikkei website confirmed the information about the expected merger in the next stage. Specific details include that Western Digital will spin off its NAND flash memory business and become a joint venture between the two parties, a move that is about to be finalized.
Any merger will require significant financial support, and it seems that Japanese banks will bear a heavy burden to cover all the costs of this huge merger, as the terms of the agreement require that the company’s headquarters be in Japan. Financial institutions are expected to participate in huge financial investments ranging from $9.3 billion to $12.7 billion to facilitate the merger process.
Initially, Kioxia will own a majority stake in the organizational structure; In later stages, both parties will have an equal share.
According to a recent report by Technavio Research Group, Kioxia's share of the NAND memory market is 19.6%, Western Digital's share is 14.7%, Samsung and SK Hynix's share is 31.1%, and SK Hynix's share is 31.1% and 17.8%, respectively. .
These numbers lead us to believe that the upcoming merger between Kioxia and Western Digital will make them the dominant force in the global NAND memory market, with the potential to capture more than 34.3% of the total market share.
However, the problem with a large-scale merger of Western Digital and Kioxia is resistance from industry influencers such as Samsung in the NAND memory sector and the crackdown on SK Hynix and Micron.
We should also not forget China's antitrust decisions and external geopolitical considerations, such as restrictions on US exports, which may affect the merger at some point.