Kioxia and Western Digital Could Announce Merger This Month

[AleksandarK]

According to Kyodo News, Japanese chip manufacturer Kioxia and its U.S. counterpart Western Digital are reportedly on the verge of finalizing a merger agreement, aiming to create the world's largest producer of memory chips. The merger plan involves establishing a holding company to consolidate their operations for producing NAND flash memory chips, with the announcement reportedly coming this month. The merged entity is expected to be listed on the Nasdaq stock exchange in the United States. As the global semiconductor market contends with competitive pressures and fluctuating demand, the merger is seen as a strategic move to enhance the combined market position of both companies.

Western Digital shareholders are anticipated to hold a majority stake in the new entity, with Kioxia's shareholders, including Toshiba Corporation, owning the remaining stake. The move is poised to give the newly formed company a combined market share of 35.4 percent in NAND memory chips as of March, surpassing South Korea's Samsung, the current leader, with 34.3 percent. However, the merger's ultimate approval hinges on regulators' decisions, including those in China, as semiconductors have become increasingly integral to global economic security. Major Japanese banks, including MUFG Bank and the state-backed Development Bank of Japan, are contemplating loans of up to approximately 1.9 trillion yen (about $12.7 billion) to facilitate the merger.



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[sam_86314]

Ah yes, exactly what the industry needs.

Especially this particular industry, which is rife with price fixing and other nonsense.

Yes, I know that WD/SanDisk uses Kioxia NAND in their drives. Why don't they just buy out Phison while they're at it as well? /s

 

[Haile Selassie]

Which ever regulator allows this, remember, they have been paid off handsomely.

Either that or stupidity. Never attribute to malice that which is adequately explained by stupidity?

 

[Chrispy_]

I don't like what this means for the spinning rust division of WD, since it looks like WD is the financially-struggling party here and Kioxia is the dominant stakeholder in this merger; I still rely on spinning rust - a typical deployment for me is over 100TB, and 5-10TB of SSDs just make up the cache for those storage arrays.

If you want spinning rust your choices these days are Toshiba, WD, and Seagate - losing one of those would be bad for the industry as a whole. Less competition means worse pricing and less incentive for progress.

 

[Zareek]

Regulators need to wake up, competition is the lifeblood of capitalism. We are already seeing issues in the U.S. in food, toiletries, general household goods. Rampant inflation because there is little to no competition. Profiteering on a whole new level.

WD is struggling because they flushed their reputation down the toilet in the name of greed. The SMR in WD Reds was the start, they just keep piling on it. Red drives throwing warnings automatically after 3 years in service. Bait and switch SSDs. What is the latest, the Sandisk external SSD failure fiasco. No sooner do they settle a class suit then the next one is filed.

 

[TheinsanegamerN]

Regulators need to wake up, competition is the lifeblood of capitalism. We are already seeing issues in the U.S. in food, toiletries, general household goods. Rampant inflation because there is little to no competition. Profiteering on a whole new level.

WD is struggling because they flushed their reputation down the toilet in the name of greed. The SMR in WD Reds was the start, they just keep piling on it. Red drives throwing warnings automatically after 3 years in service. Bait and switch SSDs. What is the latest, the Sandisk external SSD failure fiasco. No sooner do they settle a class suit then the next one is filed.

I agree with you, but I'm pretty sure the rampant inflation comes from us printing 50% of our existing currency within 18 months and doling out cheap debt for the last 30 years FINALLY coming to a head.

 

[HairyLobsters]

WD already owns SanDisk though....

 

[Random_User]

WD already owns SanDisk though....

And Hitachi. Now they are best HD drives WD has. How come?

Yes, I get that Toshiba is broke and being sold to other companies. But IMO, Kioxia better to be sold to some other Japanese companies, rather than these "pioneers" of storage.

Well, when it's partnership between companies, it means more or less benefits both of them. When it's buyout, this means one would dominate over other. Simple as that. There won't be any recognitions of Kioxia/Toshiba, as the inventor of SSD. Just the badge of worst storage brand one could only imagine (ofc Seagate as well). As soon as Kioxia will become absorbed, I somehow am sure that the quality of production will become absolute crap. IMO Not to mention the pricing. Now only parent company (WD) will set the numbers. Everyone will pay "premium" tax for their name. This is Asus of storage.

Spoiler: TL;DR

Back in the day, the dozens of thousands were used in SI I was working in. And ... the WD was the worst. Absolute garbage. Hot, and loud and vibrating as a hammer drill. Not to mention that it was failing even more than Seagate. The best were Samsung, the coolest and the quietest, and least defective. And of course Hitachi, a bit more hot, but as reliable and almost as silent.

Then, more than a decade passed, and thought, things might be turned to better. Until couple years ago one guy told me he bought PC with WD in it, and it was literally destroing his table, being used with in quality case with rubber insulators. He just bought himself an M.2.

So... considering so big outcry about Seagate as well, I think something is never being changed for good. I strongly doubt WD is even honest with their SSD product line. WD is only good, while Toshiba/Kioxia made chips for them. This is horrific company, and people praise them, just because they have no choice. Since WD already "consolidated" so many companies, and their product failure, and lack of responsibility is just astounding. Somehow, WD still recognised as "premium" brand, except their pricing.

 

[mplayerMuPDF]

Noooo. I know that this has been a long time coming but I still had some hope that some regulator (maybe China) would stop it. I do not want WD to get their grubby paws on Kioxia.

 

[kondamin]

I agree with you, but I'm pretty sure the rampant inflation comes from us printing 50% of our existing currency within 18 months and doling out cheap debt for the last 30 years FINALLY coming to a head.

No, this wave of inflation was caused by reduced production during pandemic, increased spending because everyone was locked up at home and got free government money while not having to pay rent nor student debt.(US)

demand exploded while production went down.
this is what caused the recent massive wave of inflation.
(the rest of the world is can be summed up by “global politics”)

what made it worse and massively so is exactly total lack of competition for basic goods.
And especially those big vertically integrated companies being able to use what ever they want as excuse to raise prices and never lower them as there is nothing that would force them down.

Japan is a prime example of government debt not causing inflation. It doesn’t.

Anyway, this merger is bad, and I hope the global political turmoil motivates China to start its own spinning rust company for storage to have some competition as weird as that might sound.

 

[Chrispy_]

And Hitachi. Now they are best HD drives WD has. How come?

• Hitachi worked out Helium and brought that to market successfully as a zero-downside upgrade for high-capacity drives.
• Seagate worked out Perpendicular storage and HAMR, both of which have been successfully brought to market. Seagate also invented SMR, and Hitachi were the ones to work out host-managed SMR.
• Fujitsu (Now Toshiba) brought about Advanced Format 4K sectors. It's not exactly a technological advancement but it was a necessary step and one company had to take the risk first.
• WD haven't made any notable contributions to magnetic disk technology in the last two decades.

Clearly, WD are the bottom of the intellectual barrel and make progress through acquisitions of actually-competent companies. WD's most notable news articles are infamy for being the first hard drive manufacturer dumb enough to put SMR on a NAS product, sparking a lawsuit against the whole industry for obfuscating which products leveraged SMR. The last "magnetic storage thing" they did that was "good" was to market 10K RPM, short-stroked 2.5" server drives to consumers via a SATA interface, something that is obviously obsolete now, but was actually a decent idea compared to what we were doing beforehand with PCI SCSI adapters. It's hard to call it innovation, but at least WD understand marketing which is probably why they've outlasted Quantum, Maxtor, IBM, Conner, Fujitsu, and Samsung, to name a few of the fallen giants.

 

[kondamin]

• Hitachi worked out Helium and brought that to market successfully as a zero-downside upgrade for high-capacity drives.
• Seagate worked out Perpendicular storage and HAMR, both of which have been successfully brought to market. Seagate also invented SMR, and Hitachi were the ones to work out host-managed SMR.
• Fujitsu (Now Toshiba) brought about Advanced Format 4K sectors. It's not exactly a technological advancement but it was a necessary step and one company had to take the risk first.
• WD haven't made any notable contributions to magnetic disk technology in the last two decades.

Clearly, WD are the bottom of the intellectual barrel and make progress through acquisitions of actually-competent companies. WD's most notable news articles are infamy for being the first hard drive manufacturer dumb enough to put SMR on a NAS product, sparking a lawsuit against the whole industry for obfuscating which products leveraged SMR. The last "magnetic storage thing" they did that was "good" was to market 10K RPM, short-stroked 2.5" server drives to consumers via a SATA interface, something that is obviously obsolete now, but was actually a decent idea compared to what we were doing beforehand with PCI SCSI adapters. It's hard to call it innovation, but at least WD understand marketing which is probably why they've outlasted Quantum, Maxtor, IBM, Conner, Fujitsu, and Samsung, to name a few of the fallen giants.

Do they still need marketing for magnetic storage?
those that need it just need it

 

[Chrispy_]

those that need it just need it

Which is exactly why it would suck if WD collapsed, or was wound down as part of this merger.
Those that 'just need it' are a captive audience and when it becomes a duopoly prices go up for no other reason than a reduction of competition in the market.

 

[chrcoluk]

Unless NAND has hideous yield's it doesnt need rocket science to guess margins are lower on spindles.

Just look at what is been produced.

A HDD has multiple spinning spindles, a head, as well as a chipset, cache, air sealed heavy thick casing and finally the motor.

A SSD in M.2 form doesnt even have the old cheap SATA casing, can be dramless, no moving parts, much lower storage costs due to size, much lower transport costs due to size and weight, cheaper packaging.

 

[kondamin]

Unless NAND has hideous yield's it doesnt need rocket science to guess margins are lower on spindles.

Just look at what is been produced.

A HDD has multiple spinning spindles, a head, as well as a chipset, cache, air sealed heavy thick casing and finally the motor.

A SSD in M.2 form doesnt even have the old cheap SATA casing, can be dramless, no moving parts, much lower storage costs due to size, much lower transport costs due to size and weight, cheaper packaging.

But for some reason I can get 20tb for a couple of hundred in spinning rust but 20tb in ssd will cost me thousands

 

[chrcoluk]

But for some reason I can get 20tb for a couple of hundred in spinning rust but 20tb in ssd will cost me thousands

As I said, margins.

SSDs can command a premium.