Kioxia-Western Digital Merger Reportedly Gets Financing

Kioxia’s lenders have committed to refinancing $14 billion in loans to help merge Kioxia and the flash storage business of Western Digital merge to become one of the world’s largest flash memory and SSD companies.

Merger talks between flash memory and SSD manufacturing giant Kioxia and flash and spinning disk manufacturer Western Digital are continuing to advance slowly, with financial news site Bloomberg now reporting that moves to finance the deal may be on the way.

Bloomberg reported late Tuesday that lenders of Tokyo-based Kioxia Holdings, parent company of Kioxia, next month plan to submit a commitment letter to refinance $14 billion in loans to help fund the merger of Kioxia with Western Digital’s flash memory business.

Bloomberg, citing unnamed sources, said that under the terms of the deal, which is still being negotiated, about 50.5 percent of the merged business will be held by Western Digital, while 49.5 percent will be held by Kioxia.

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Western Digital’s hard drive business will likely not participate in the deal, Bloomberg wrote.

Kioxia told CRN via email that it does not respond to “speculations and rumors.” Western Digital did not respond to a CRN request for further information by press time.

Kioxia, which until October of 2019 was known as Toshiba Memory, is a world leader in flash memory and SSD technologies, including SLC NAND flash memory, NAND with integrated controllers, and 3D BiCS FLASH technology, along with enterprise, data center, and client SSDs.

Western Digital and Kioxia have a 20-year joint venture for developing flash memory at the Yokkaichi Plant, the largest semiconductor plant in Japan. The two companies in late March jointly unveiled their newest 3D flash memory technology they said reduces costs with new processes and architecture.

Speculation about bringing Western Digital and Kioxia together to build a flash memory and SSD giant has been going on for over two years.

Western Digital and Kioxia were looking at a possible merger in August 2021, although those talks went nowhere.

Prior to that, Western Digital and Boise, Idaho-based DRAM and flash memory manufacturer Micron were looking at a possible acquisition of Kioxia in a deal that might value Kioxia at about $30 billion.

Western Digital and Kioxia have a 20-year joint venture for developing flash memory at the Yokkaichi Plant, the largest semiconductor plant in Japan.

Western Digital in June of 2022 said it was evaluating strategic and financial alternatives, including a full separation of its flash business. A month earlier, activist investment company Elliott Investment Management asked Western Digital to split into two companies, one focused on spinning hard drives and the other on flash drives, as a way to maximize the value of both technology lines.

Such a separation, should it come to pass, would follow a similar move by Intel late 2021 to sell its flash technology business to South Korea-based SK Hynix, which became a new flash storage company named Solidigm.

Western Digital and Kioxia revived talks about a merger in January 2023, according to Bloomberg. Discussions accelerated in June, according to Japanese news agency Kyodo News.