The logo of the Western Digital Corporation will be displayed on May 27, 2019 at the company’s headquarters in Tokyo, Japan. REUTERS / Yoshiyasu Shida

New York / Tokyo, August 25 (Reuters) – Western Digital (WDC.O) is in advanced talks with Japanese chip maker and partner Kyoksia for a $ 20 billion joint venture. NAND memory giant with Samsung Electronics (005930.KS).

The companies could reach an agreement in mid-September, said David Digital, chief executive of Western Digital.

The Wall Street Journal reported the discussion earlier Wednesday. Kyoshi Holdings Corporation and Western Digital have both told Reuters they will not comment on merger estimates.

The combination of the two is rewriting the competition to capture the strong demand for memory chips in the wake of the 5G expansion and the domestic epidemic.

According to Research Force Research, Samsung controls more than a third of the DNA market, with Kioxia accounting for about 19% and Western Digital for 15%. South Korea’s SK Hynix Inc (000660.KS) and American companies Micron Technology Inc. (MU.O) and Intel Corp (INTC.O) are other big players.

In a research note, Morningstar analyst William Kerwin said:

“In the long run, we expect the NAND market to … strengthen three major players as much as commodities,” said Kerwin.

The memory chip industry is already booming, with Hynics agreeing to buy Intel’s NAND business for $ 9 billion last year. Read more

The integration of Western digital-kiosks is likely to lead to anti-Semitism in many countries, including the United States and China.

Monopoly concerns and years of trade disputes between the United States and China have eroded agreements over the past few years.

For example, Qualcomm Inc (QCOM.O), NXP Semiconductors (NXPI.O) has withdrawn from the $ 44 billion deal to buy China in 2018, and Nvidia Corporation (NVDA.O) has set a $ 40 billion plan for Britain. Chip designer RM faced a major hurdle in the UK last week. Read more

China’s anti-corruption watchdog did not immediately respond to requests for comment on the approval of the Western Digital-Kyoshia Agreement.

Owners of Kioxia

In Japan, the two companies jointly produce NAND chips that do not require power to store data and are used in smartphones, televisions, data center servers and public display panels.

Mornister Kerwin: “We believe that Kyoksia, which is privately owned, will have a strong return of $ 20 billion or more.

A.D. In 2018, Toshiba Corporation (6502.T) acquired Kosia, which was sold for $ 18 billion by the Toshiba Memory Corporation to Bain Capital. What will be Japan’s largest public offering in 2020?

If Kioxia fails to reach an agreement with San Jose, Western Digital in California, the IPO could still exist, the source told Reuters. Financial Magazine Diamond plans to launch an IPO in early September in Kioksia.

In a statement to Reuters on Thursday, Kioksia considered the timing for the IPO.

Toshiba, which still owns 40.6% of Kyoksia, is in talks with at least four international private companies to find ideas for the new strategy, Reuters reported on Wednesday. Read more

Toshiba shares rose 1.3% in afternoon trading.

Western digital shares closed 7.8% on Wednesday, giving market capitalization more than $ 20 billion.

Toshiba said he was not involved in the Kyoshi administration and did not comment. He said he continues to consider the most appropriate approach to investing in Kyoxia to increase the value of shareholders.

Bay was not immediately available for comment.

Report by Eva Matthews in Bengaldu, Crystal Hu in New York and Tokyo Makiko Yamazaki; Additional report by Brenda Goh in Shanghai: Writing by Yantani buffalo; Edited by Stephen Cots and Tom Hog

Our Standards – Thomson Reuters Principles.