Western Digital to Separate Flash Memory and Hard Drive Businesses After Kioxia Merger Efforts Stall

Western Digital's decision to separate its NAND flash and hard drive operations into two independent companies comes as the memory markets face significant challenges; projected completion in second half of 2024.

Following stalled efforts to merge with Japanese memory company, Kioxia, Western Digital is now looking to separate its NAND flash and hard drive operations into two independent companies. The proposed separation targets completion in the second half of 2024.
Western Digital's decision to split follows a series of challenges in the memory markets, including low NAND flash prices and the complexities of managing two disparate businesses. The company suffered losses of $685 and $715 million in the previous two quarters, primarily due to rock-bottom NAND flash prices.
The company's CEO, David Goeckeler, asserts that the separation will allow both businesses to better capitalize on market opportunities and unlock significant value for shareholders. Meanwhile, questions remain about how the split will affect Western Digital's brand and ongoing operations.
With the separation, Western Digital is effectively unwinding its 2016 acquisition of SanDisk, a flash memory manufacturer, which marked Western Digital's entrance to the flash business sector. The acquired SanDisk operations were part of the NAND division that will now be separated.
The decision to split the company aligns with suggestions made by activist investor, Elliott Management, who advised Western Digital to separate the two units last year in a bid to increase profitability and company performance.