SK Hynix Punches a Blow to Western Digital's Kioxia Merger Plans, But It May Not Be Game Over Yet

General
SK Hynix Punches a Blow to Western Digital's Kioxia Merger Plans, But It May Not Be Game Over Yet

As reported a few days ago, storage giant Western Digital was planning a merger with Kioxia Holdings, a competitor in the same NAND flash and RAM market. As a result, the combined group would gain a greater share of sales than Samsung, the current holder of that honor. However, SK Hynix is not at all happy with the deal, and the entire transaction has been scuttled.

This is according to reports from Reuters and other sources, and none of the three companies have said anything publicly. For those who may not know, SK Hynix is one of the world's largest DRAM and NAND flash manufacturers and a significant investor in Kioxia, formerly Toshiba Memory.

The field of memory and solid state storage is a complex issue, especially which manufacturers make which brands and what position each manufacturer holds in the flash market. According to research firm Trendforce, Samsung is the clear leader in the latter, with Kioxia and SK Hynix in a close race for second place.

Western Digital, which manufactures the best gaming SSDs, is far behind in fourth place. Therefore, it is not surprising that the company is keen for the merger to go through; a WD/Kioxia merger would put it far ahead of Samsung in terms of revenue and behind SK Hynix.

SK Hynix has made a reasonable return on its investment in Kioxia and clearly does not want to lose it. The company currently occupies second place in the DRAM market behind Samsung, and while the merger will not directly affect that, it will be difficult for it to remain competitive if flash revenues fall.

So what does this mean for those of us who just want cheap RAM and SSDs for our gaming PCs? For now, it doesn't mean much, but the fewer competitors there are in an unstable market, the greater the risk that one company will completely dominate everything. Once that happens, the era of cheap memory and storage will be over.

This new obstacle is not surprising since the planned merger between Western Digital and Kioxia has been in the works for years. Whether the deal can be worked out to the satisfaction of all parties remains to be seen, but eventually it will be done. Before that happens, this may be the perfect opportunity to get memory and storage into PCs.

Categories