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According to the reports from EETimes China and Blocks &Files, Western Digital (WD) is said to be considering spinning off its NAND and SSD business, which could be valued similarly to Solidigm.
Reportedly, WD plans to split into two separate business units: one focused on producing hard disk drives (HDDs) and the other on NAND flash memory and SSDs. This strategy is expected to enhance operational efficiency within each unit, allowing them to concentrate on their core strengths and ultimately achieve greater market value.
According to the report, WD CEO David Goeckeler will lead the NAND and SSD unit, while Executive Vice President of Global Operations Irving Tan will take on the role of CEO for the HDD business
Citing calculations by an analyst, the report notes that the standalone value of WD’s NAND and SSD business could range from USD 10 billion to 22 billion. This suggests that spinning off these businesses could lead to a higher market valuation for the company.
The report states that the market has not yet fully recognized the value of WD’s NAND business, and that the combined independent value of the two companies post-split will be at least USD 30 billion, with the potential to exceed USD 40 billion.
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(Photo credit: Western Digital)
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Japanese NAND flash giant Kioxia announced today (August 1st) that the building construction of Fab2 (K2) of its Kitakami Plant in Iwate Prefecture was completed in July. As demand is recovering, the company will gradually make capital investments while closely monitoring flash memory market trends. Kioxia plans to start operation at K2 in the fall of Calendar Year 2025, according to its press release.
A portion of investment for K2 will be subsidized by the Japanese government according to the plan approved in February 2024, according to Kioxia.
In addition, the company notes that some administration and engineering departments will move into a new administration building located adjacent to K2 beginning in November 2024 to oversee the operation of K2.
According to a report from Nikkei on July 31, Kioxia’s Kitakami Plant started production in 2020,with the construction of K2 began in 2022. Initially, K2 was scheduled to commence production in 2023.
However, due to a downturn in the memory market and weak demand for NAND Flash used in smartphones and PCs, Kioxia started to reduce production in October 2022, with the extent of production cuts exceeding 30%. As part of these production reduction measures, Kioxia postponed the production start of the K2 facility.
Nikkei’s report further indicates that with market conditions recovering, Kioxia ended its production cuts in June 2024, and the current production line utilization rate has returned to 100%.
To mass-produce advanced memory products, Kioxia, in collaboration with Western Digital (WD), plans to invest a total of 729 billion yen in the Yokkaichi and Kitakami plants, with the Japanese government providing up to 243 billion yen in subsidies.
The Kitakami plant will produce the most advanced “8th generation” memory, with a monthly production capacity of 25,000 wafers. These will be used in AI data centers, as well as in smartphones, PCs, and automotive applications.
On June 26, according to industry sources cited in a report from Reuters, Kioxia plans to submit an initial public offering (IPO) application to the Tokyo Stock Exchange in the near future, aiming to go public by the end of October. Sources indicate that Kioxia will submit its official IPO application by the end of August, with a target listing date at the end of October.
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(Photo credit: Kioxia)
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Recently, Korean SSD controller manufacturer FADU announced a partnership with Western Digital to co-develop the next-generation enterprise SSD technology called “FDP (Flexible Data Placement).”
FDP is a standard technology proposed by the Open Compute Project (OCP) and is a newly approved NVMe specification (TP4146) initiated by companies such as Samsung, Meta, and Google. It aims to reduce write amplification while simplifying the integration of the entire software ecosystem.
According to a report from WeChat account DRAMeXchange, this technology not only enhances SSD performance but also significantly extends SSD lifespan.
By markedly reducing the phenomenon of “Write Amplification,” FDP can improve SSD write performance by 2 to 3 times and optimize data placement within SSD storage space. This phenomenon, when the recorded data volume is much larger than the actual client data volume, will greatly extend SSD lifespan, making it a highly regarded technological innovation in massive data exchange environments of large-scale data centers.
Founded in 2015, FADU is a fabless startup primarily developing advanced NAND flash technologies to meet the explosive growth of data storage needs in hyperscale, enterprise, and cloud data centers. FADU is committed to producing high-performance SSD controllers and designing chips for data centers.
FADU aims to increase its market share in the SSD controller field to 30% by 2026. FADU’s CEO, Jihyo Lee, stated at an IPO briefing in July 2023 that global data centers used 50 million SSD controllers at that time, and the demand might double to 100 million in the next 2-3 years.
As a globally renowned memory manufacturer, Western Digital achieved revenues of USD 1.71 billion in 1Q24, a 2.4% increase from the previous quarter. However, due to a limited product line, Western Digital’s revenue in the Enterprise SSD sector for the quarter was USD 133 million, only up by 18.1% QoQ.
It’s worth noting that in 2Q24, the overall consumer market not yet recovers and the outlooks for PC and smartphone market for the year are conservative. Against this backdrop, Western Digital intends to accelerate Enterprise SSD product development to expand future growth momentum.
Western Digital is also aggressively pursuing shipments of high-capacity storage products, with plans to mass-produce 162-layer QLC SSDs. To accelerate the production of PCIe 5.0 SSDs, the company is collaborating with third-party controller manufacturers, breaking its tradition of in-house IC development. This strategic move underscores Western Digital’s efforts to expand its product range and support steady growth in enterprise SSD revenue.
For this collaboration, FADU and Western Digital predict that widespread adoption of FDP technology will not only help bring down total cost of ownership (TCO) but also establish a new standard for memory efficiency.
Amidst the AI wave, the importance of high-capacity, high-performance storage products is becoming increasingly prominent. HBM is undoubtedly the most sought-after product currently, with demand outbalancing supply and market value continuously rising. Meanwhile, new memory technologies are constantly emerging, heralding the coming of an era of 3D DRAM. Besides, SCM potential is about to be unleashed, and PCIe 6.0/7.0 is poised to be launched.
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(Photo credit: WD)
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According to the report from MoneyDJ, Western Digital (WD), a well-known memory device manufacturer, reported its latest financial report after the American stock market closed on April 25. Both revenue and profit for 1Q24 were better than market expectations, mainly driven by the robust AI demand and cloud service providers’ proactive acts in AI investment, which significantly boosted data storage demand.
According to WD’s financial result for fiscal third quarter 2024 (ending March 29, 2024), revenue increased by 23% YoY to USD 3.46 billion, surpassing the expected USD 3.36 billion from LSEG’s survey. Gross margin rebounded to 29%, up 18.8 percentage points from the same period last year at 10.2%; Net profit turned from a loss to a gain of $110 million, or USD 0.34 per share, far better than the net loss of USD 580 million, or net loss of USD 1.82 per share in the same period last year. Excluding one-time expenses, adjusted earnings per share were USD 0.63.
The main “Cloud” segment saw robust revenue growth of 29% in the third quarter to USD 1.55 billion, mainly fueled by enterprises’ acceleration and expansion of data center construction, stimulating memory demand growth, with prices also rising accordingly.
Its competitor Seagate, a HDD manufacturer, also reported impressive financial results on April 23, with last quarter’s performance beyond expectations. The company expected continued growth of AI-driven memory demand and give a positive business outlook for this quarter.
Looking ahead to fiscal fourth quarter 2024 (ending June 28, 2024), WD estimates revenue will be USD 3.6-3.8 billion; adjusted earnings per share are estimated to be USD 0.90-1.20.
WD previously announced the separation of its two main product divisions, HDD and NAND Flash. The NAND Flash division will be spun off into a new company and go public, and the transaction is expected to be completed in the second half of 2024. Moving forward, WD will focus on its core HDD business to bring greater value to shareholders.
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(Photo credit: WD)
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According to industry sources cited in a report from Business Korea, Japanese NAND Flash supplier Kioxia is preparing to restart its merger plan with its partner Western Digital (WD). However, SK Hynix, a major shareholder and Korean memory giant, continues to firmly oppose the merger.
The same report citing industry sources also indicates that Kioxia could potentially go public on the Tokyo Stock Exchange as early as October 2024, according to its schedule. Kioxia’s major shareholder, Bain Capital, a U.S. private equity firm, has engaged its creditor banks to review the listing process, with the banks providing over JPY 1 trillion in loans to support this effort.
Despite facing losses of JPY 254 billion from the second to fourth quarters of 2023 and the impending repayment of a JPY 900 billion loan in June 2024, Kioxia has seen improved market conditions in the memory market, leading to higher market quotations and increased revenue to address these financial challenges. This resurgence has prompted Kioxia to restart its merger plans with WD, with the backing of creditor banks supporting this initiative.
However, SK Hynix, which indirectly holds a 15% stake in Kioxia through a KRW 4 trillion investment in Bain Capital, has explicitly stated its opposition to restarting the merger between Kioxia and Western Digital. A representative from SK Hynix cited by the report from Business Korea stated that their position against the merger of Kioxia and WD remains unchanged. However, they are open to discussing potential cooperation under conditions that protect their investment interests.
In 2023, Kioxia and Western Digital had drafted a merger agreement that was blocked due to opposition from SK Hynix. The same report, citing industry sources, suggests that SK Hynix is expected to continue opposing the merger of the two companies. SK Hynix intends to leverage its advantages in the normalization of the NAND Flash market to maximize the gap in market conditions between itself and Kioxia/ WD as much as possible.
For the NAND Flash market, TrendForce’s report in march has indicated that, as of the fourth quarter of 2023, SK Group captures the global market with a share of 21.6%, followed by WD (14.5%) and Kioxia (12.6%).
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(Photo credit: Western Digital)