Japan’s Kioxia, Western Digital to resume merger talks in April- Asahi

investing.com:

Investing.com-- Semiconductor maker Kioxia Holdings and U.S. partner Western Digital Corporation (NASDAQ:WDC) will resume negotiations for a potential merger in late-April 2024, Japanese newspaper Asahi Shimbun reported on Friday.

The report comes after talks over a potential merger fell through in October 2023, after opposition from memory chipmaker SK Hynix Inc (KS:000660), which is a stakeholder in Kioxia.

WD and Kioxia will have to wait for a set period of time before resuming negotiations, Asahi reported, citing officials familiar with the matter. 

The deal, if completed, stands to form one of the world’s largest memory chipmakers, comparable in size to South Korean giant Samsung Electronics Co Ltd (KS:005930). SK Hynix had also opposed the deal on the grounds of increased competition.

Kioxkia was spun off from Japanese conglomerate Toshiba (OTC:TOSYY) in 2018, and was credited with inventing high-speed flash memory while still part of the firm. It is now majority owned by Bain Capital.

Talks for a merger with Western Digital, with whom Kioxia has a joint manufacturing agreement, came amid a sustained earnings downturn for both firms, as sales weakened and competition increased in the memory chip market.

But increased interest in artificial intelligence development, with the advent of generative AIs over the past year, is expected to boost demand. High-bandwith memory chips are a key component of running the large language models that power generative AI.