Kioxia is reportedly in advanced discussions with U.S. counterpart Western Digital about a potential merger. The merger, which is anticipated to be finalized this month, would result in the formation of the world's foremost memory chip producer. An integration of their operations, focusing on NAND flash memory chip production – essential for devices like PCs and smartphones – is under consideration.
The joint venture intends to be listed on the U.S. Nasdaq stock exchange. This strategic decision arises in a period where chip producers globally are grappling with intense competition, coupled with a diminishing demand for semiconductors. The ownership structure of the anticipated merged entity is expected to comprise just over 50% shareholders from Western Digital and the balance from Kioxia. Notably, Toshiba is a significant stakeholder in Kioxia, possessing approximately 40% ownership.
When comparing market shares, the combined entity of Kioxia and Western Digital held 35.4% for NAND memories as of March. This surpasses even the industry leader, South Korea's Samsung Electronics, which had a market share of 34.3%. However, regulatory approvals, especially from international authorities like China, remain a hurdle, given the escalating significance of semiconductors in global economic security. To streamline the merger process, leading banks, including MUFG Bank and the Development Bank of Japan, are contemplating extending loans approximating ¥1.9 trillion ($12.7 billion).
As of now, both Kioxia and Western Digital have collaborative operations in plants located in Iwate and Mie prefectures. Kioxia has refrained from commenting on these merger discussions.
