What you need to know
- Western Digital and Kioxia might merge.
- The gestating deal is worth over $20 billion.
- Nothing's final, but the deal could go through as soon as September.
If you keep up on the state of the chipmaking industry and care about whose NAND output trumps whom, this newly reported deal is one you won't want to miss: Western Digital and Kioxia Holdings Corp. may be gearing up to finalize a merger, which will be worth over $20 billion.
The report comes from the Wall Street Journal. It states that Western Digital is in "advanced talks" with Kioxia over a potential merger, though nothing's final or guaranteed. With that in mind, the merger could happen as soon as mid-September, according to WSJ's sources.
Western Digital would finance the deal via stocks and its CEO, David Goeckeler, would spearhead the freshly combined company, should everything pan out. This news also highlights that Micron has been more or less eliminated from the current conversation, though it too was eyeballing Kioxia not too long ago.
This deal would require a green light from Japan due to Kioxia's presence and standing in the country. Furthermore, Chinese regulators would also see a role in ensuring the deal comes to fruition, as would U.S. regulators. However, the deal stands to benefit the U.S., meaning in the chipmaking war between the U.S. and China, the latter has a major incentive to strike down the merger.
It's as Intel CEO Pat Gelsinger recently said: The chipmaking industry is consolidating. The question is whether Western Digital, makers of the best SSDs, and Kioxia will go through with things, or if they'll be roadblocked by external forces much like how NVIDIA's Arm acquisition is being slowed.
