Western Digital would be 43% owned by Japanese Kioxia, 37% by Western Digital, and the rest by existing shareholders of the companies

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Terms of the Western Digital-Kioxia deal, according to Reuters, would be 43% owned by Kioxia, 37% by Western Digital, and the rest by existing shareholders of the companies.

Western Digital Stock Spikes on Report It Nears Flash Memory Merger With Kioxia

By

Eric J. Savitz

May 15, 2023 12:31 pm ET

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Most of Western Digital’s flash-memory chips are produced by the company’s joint venture with Japan-based Kioxia.

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Western Digital WDC +11.26% stock was trading sharply higher Monday after a report that merger talks with the company’s partner in flash-memory production, Kioxia Holdings, are speeding up.

Western Digital (ticker: WDC) produces both disk drives and flash-memory products. Most of the company’s flash-memory chips are produced through a joint venture with Japan-based Kioxia.

Soft demand in the flash-memory market is increasing pressure on the two companies to reach a mergaer agreement, Reuters reported.

Neither Western Digital nor Kioxia immediately responded to a request for comment.

In midday trading, Western Digital shares were up 9.7% to $36.24.

Last year, activist investor Elliott Investment Management urged Western Digital to spin off the flash-memory business, and the company later said it was considering a split.

Western, which along with rival Seagate (STX) dominates the market for hard-disk drives, entered the flash-memory business with the 2016 acquisition of SanDisk for about $19 billion. Western’s current market cap is $11.3 billion.

Kioxia was previously Toshiba ’s flash-memory business, which was sold in 2018 to a group led by Bain Capital for $18 billion. Toshiba still owns 40.6% of Kioxia.

Terms of the Western Digital-Kioxia deal, according to Reuters, would be 43% owned by Kioxia, 37% by Western Digital, and the rest by existing shareholders of the companies.

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What a storied tale of American technology and innovation. What most users don’t know about WD. This is really an end of an era.

Western Digital Corporation (WDC, commonly known as Western Digital or WD) is an American computer drive manufacturer and data storage company, headquartered in San Jose, California. It designs, manufactures and sells data technology products, including data storage devices, data center systems and cloud storage services.

Western Digital has a long history in the electronics industry as an integrated circuit maker and a storage products company. It is one of the largest computer hard disk drive manufacturers, along with producing solid state drives and flash memory devices. Its competitors include the data management and storage companies Seagate Technology and Micron Technology.[3]

History

Western Digital logo history

Logo used from 1970 to 1971

Logo used from 1971 to 1991

Logo used from 1991 to 1997

Logo used from 1997 to 2004

Logo used from 2004 to 2017

Logo used from 2017 to 2022

Current logo

1970s

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First headquarters of Western Digital (then General Digital) in Newport Beach, California, pictured in 1971

Western Digital was founded on April 23, 1970, by Alvin B. Phillips, a Motorola employee, as General Digital Corporation, initially a manufacturer of MOS test equipment.[4] It was originally based in Newport Beach, California,[5] shortly thereafter moving to Santa Ana, California, and would go on to become one of the largest technology firms headquartered in Orange County.[6] It rapidly became a specialty semiconductor maker, with start-up capital provided by several individual investors and industrial giant Emerson Electric. Around July 1971, it adopted its current name and soon introduced its first product, the WD1402A UART.

During the early 1970s, the company focused on making and selling calculator chips, and by 1975, Western Digital was the largest independent calculator chip maker in the world. The oil crisis of the mid-1970s and the bankruptcy of its biggest calculator customer, Bowmar Instrument,[7] changed its fortunes, however, and in 1976 Western Digital declared Chapter 11 bankruptcy. After this, Emerson Electric withdrew their support of the company. Chuck Missler joined Western Digital as chairman and chief executive in June 1977, and became the largest shareholder of Western Digital.

In 1973, Western Digital established its Malaysian plant, initially to manufacture semiconductors.[8]