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Micron and Western Digital may buy Japanese company Kioxia for $ 30 billion
Toshiba’s long-suffering solid-state memory business has recently run under the guise of Kioxia and is owned by a consortium of investors, and the company had to postpone its IPO in late September due to unfavorable market conditions. Now, if rumors are to be believed, Kioxia may put its assets up for sale, with Micron and Western Digital as likely buyers.
Image Source: Nikkei Asian Review
The trend towards consolidation in the semiconductor industry has been observed for several years in a row, although increasing transaction amounts inevitably slowed it down. Intel Corporation, even under the previous CEO, decided to sell its Chinese enterprise to the Korean company SK Hynix for $ 9 billion. This deal pales against the background of the intentions of the Japanese company Kioxia, discussed by the sources of The Wall Street Journal, to raise $ 30 billion for its own assets. If buyers are not found by the end of spring or do not agree to the proposed terms, Kioxia will return to the issue of preparing for the public offering.
The desire of the authorities of many countries to achieve «technological sovereignty» may complicate the preparation of the deal. On the one hand, the American companies Micron Technology and Western Digital Corporation can acquire enterprises for the production of solid-state memory in Japan, although the second of them already has them as part of a joint venture with the same Kioxia. On the other hand, the Japanese authorities were previously reluctant to hand over the leading national semiconductor manufacturer to foreign hands, and now this reluctance will only intensify.
When Kioxia abandoned its IPO plans in September last year, the company’s capitalization was estimated at $ 16 billion. If now it is planned to earn $ 30 billion for the assets of Kioxia, then this is a very good price. Micron Technology’s capitalization reaches $ 100 billion, and rival Western Digital claims capitalization in the region of $ 20 billion. Experts have repeatedly noted that by highlighting the solid-state business back, WDC could improve this indicator.
In 20221, Toshiba Memory Corporation was sold to a consortium of investors led by Bain Capital for $ 18 billion. Apple, Dell, Kingston and Seagate became shareholders of the company, but the parent corporation Toshiba managed to retain a 40% stake. In 2021, the company was renamed Kioxia, and former Intel CFO Stacy Smith was appointed as its head. The parties to a possible deal on the sale of Kioxia assets have not yet commented on these rumors.