Signs of Resumption in Management Integration Between Japan's Kioxia and US's Western Digital

Japanese company Kioxia, a producer of memory semiconductor NAND flash (hereinafter NAND), has been detected making moves to resume merger negotiations with Western Digital in the United States.

On the 27th, major foreign media including Kyodo News reported this. Previously, in October last year, SK Hynix opposed the merger negotiations between Western Digital and Kioxia, causing them to be suspended. To resume talks, Bain Capital in the U.S., which is also a shareholder, is reportedly negotiating again with SK Hynix.

Kyodo News, citing sources, analyzed, "SK Hynix appears to be willing to be involved in the merger in some form, wary of weakening its influence over Kioxia." However, if SK Hynix joins and a specific semiconductor market share increases significantly, there is a risk of violating antitrust laws.

Kioxia's largest shareholder is a Korea-U.S.-Japan consortium including Bain Capital. SK Hynix invested about 4 trillion won in this consortium in 2018. Kioxia and Western Digital had pursued a plan to separate Western Digital's memory semiconductor business to establish Kioxia Holdings and a holding company to integrate management, but this was halted.

Kwack No-jeong, CEO of SK Hynix, said in October last year regarding this, "If there is a better plan or new alternative, we can definitely consider and discuss it together," leaving room for future negotiations.

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