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Kioxia offers to make chips for SK Hynix in bid to revive merger talks with Western Digital

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Update time : 2024-02-26 18:07:41
        Japanese 3D NAND flash memory maker Kioxia has offered its investor and South Korean rival SK Hynix to allow it to produce non-volatile memory at Kioxia's plant in Japan, Reuters reported, citing Kyodo News. The move is aimed at getting SK Hynix to change its opposition to Kioxia's planned merger with Western Digital, and it's unclear whether SK Hynix would be interested in the offer.
        Merger talks between Armor and WD stalled last year because South Korean company SK Hynix opposed the merger of the U.S. and Japanese firms to form a major 3D NAND flash chip giant, which SK Hynix had blocked because the combined company would have been much larger than itself. To overcome this obstacle and gain SK Hynix's support, ArmorMan has proposed that it be allowed to use the Japanese 3D NAND fabs jointly operated by ArmorMan and Western Digital to produce chips. This strategic offer is designed to pave the way for merger approval, ultimately creating a giant in the global 3D NAND flash chip market.
With the additional capacity provided by Armor, SK Hynix could significantly boost its 3D NAND memory production without having to invest in expansion or new factories, which seems to be an attractive proposition. However, specific financial terms of the deal have not been disclosed.
        Based on market shares tracked by TrendForce for the third quarter of 2023, the combined ArmorMan and Western Digital would control about one-third (31.4%) of the global 3D NAND market. That's well above SK Hynix's 20.2% share and close to Samsung's 31.4%. Even if some of ArmorMan's (or the merged entity's) capacity is made available to SK Hynix, the new company could still be bigger than the South Korean memory giant, which is why SK Hynix may still see it as a major threat. It should be noted that neither Armor Man nor SK Hynix has confirmed any talks about capacity, so this information should be taken with a grain of salt.

 
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