Western Digital Corp.’s merger talks with Japanese chipmaker Kioxia Holdings Corp. have stalled, according to two people familiar with the matter.
People said talks stalled in recent weeks on a number of issues, including valuation discrepancies, uncertainty about securing approval from the Japanese government and an ongoing strategic review at Toshiba Corp, a shareholder of Kioxia.
People who requested anonymity to discuss private matters said Western Digital is still eager to strike a deal with the right circumstances.
A Kioxia spokesperson said the company did not comment on the speculation, while Western Digital was not immediately available for comment.
Earlier in August, media outlets including Reuters reported that Western Digital was in advanced talks with Kioxia for a potential $20 billion stock merger, a move that would make the NAND memory giant to rival Samsung Electronics.
Kioxia, sold by Toshiba to a consortium led by Bain Capital in 2018, postponed plans for an initial public offering after US-China trade tensions last year slammed Huawei, one of Kioxia’s biggest customers.
A Kioxia spokesperson said the company is still considering an appropriate time to IPO. If this happens, the listing in the public market is likely to happen next year, sources said.
Kioxia’s business has benefited from pandemic-fueled purchases of electronic components and long-term demand for new chip technology, including 5G connectivity.
A combined Kioxia-Western Digital NAND will control a third of the flash market, putting it on par with South Korea’s Samsung Electronics.
A senior member of Japan’s ruling party told Reuters last month that any alliance between Japanese and American companies should ensure that critical operations are divided equally between the two countries.
The Wall Street Journal first reported the stalled talks on Thursday.
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