Western Digital (WD) is said to be in the middle of persuading Kioxia to merge, with a transaction value of more than USD 20 billion.
Kioxi is one of the largest manufacturers of NAND flash chips in the world. According to Counterpoint, Kioxia had the second largest revenue after Samsung in Q1 2021, and was just above WD.
The merger of the two -- if it happens -- will make a big difference in the NAND flash chip industry, as the combination of the two will overtake Samsung's dominance in the business.
Over the past few years, this storage chip maker has been under very heavy pressure. They must be able to make storage chips that are faster, denser, and of course have a large production volume but at a low price.
This makes small companies almost have no opportunity to grow.
WD itself has been eyeing Kioxia for a long time, since 2017 when Kioxia broke away from Toshiba whose business continued to deteriorate. At that time WD was willing to pay USD 18.2 billion, but the offer was rejected by Toshiba.
Now, the value of WD has reached USD 19 billion, and Kioxia is just getting ready to market its shares to the public. Previously there was also Micron who was interested in acquiring Kioxia, but they thought the plan was too wild and canceled it.
WD has previously collaborated with Kioxia on various projects.
"We have a great partnership with Kioxia, and we're excited to create a future together," said David Goeckeler, CEO of WD. He also stated that if the WD and Kioxia markets were combined, they would be as big as Samsung, and have the potential to grow even bigger.