According to two individuals familiar with the subject, Western Digital Corp’s (WDC.O) talks to merge with Japanese chipmaker Kioxia Holdings Corp have halted, underlining the difficulties in closing acquisitions in the expanding semiconductor business.
The talks have come to a halt in recent weeks due to a number of difficulties, including valuation inconsistencies, uncertainty about obtaining government approval, and an ongoing strategic assessment at Kioxia shareholder Toshiba Corp (6502.T), according to the people.
Western Digital is still interested in pursuing the purchase under the appropriate terms, according to the people, who spoke on the condition of anonymity to discuss private topics.
Kioxia’s representative stated that the company is still deciding on the best time to go public. If a public market listing occurs, it is expected to happen next year, according to sources.
Kioxia’s business has profited from pandemic-driven electronic gadget sales as well as longer-term demand for innovative semiconductor technologies, such as 5G connectivity.
Kioxia-Western Digital together would dominate a third of the NAND flash industry, placing it on a level with Samsung Electronics of South Korea.
A senior member of Japan’s ruling party told Reuters last month that any joint venture between Japanese and American corporations should ensure that vital operations are split equally between the two countries.
