Merger between Western Digital, Kioxia to create bigger rival for Samsung in memory chips

Western Digital Corp. and Japan’s Kioxia Holdings Corp are in merger talks that could be worth over $20 billion and create a bigger competitor for Samsung Electronics Co. in the market for memory chips used as storage in portable devices and computers.

The deal between longtime joint venture partners may be reached as early as mid-September.

Kioxia, which is closely held, is pursuing an initial public offering,

Western Digital, whose shares rose as much as 15 percent after the talks were reported, has a market value of about $20 billion.

Kioxia spun out of Toshiba Corp., the inventor of flash memory, which is taking over for data storage from hard disk drives, Western Digital’s main product.

Kioxia and Western Digital had combined flash memory chips sales of about $17 billion last year against Samsung's $18.6 billion.

Industry sales soared 37 percent in 2020.

Western Digital has funded Kioxia's capital expenditure and research and development in return for production from the latter's plants.

The relationship has been fractious with an attempt by Western Digital, under a previous CEO, to acquire Kioxia when Toshiba was financially troubled.