Benzinga | Aug 26, 2021 09:48AM EDT

Western Digital, Kioxia Negotiate Over Building Chip Giant

* Reuters reports that Western Digital Corp (NASDAQ:WDC) is in advanced discussions regarding a potential $20 billion stock merger with Japanese chipmaker and partner Kioxia to tap the 5G expansion and pandemic driven remote working.

* However, the Wall Street Journal reported that Kioxia could also ditch the merger and opt for an IPO.

* It could create a NAND memory giant to Korean rival Samsung Electronics Co Ltd (OTC:SSNLF), which announced a significant chip building initiative.

* The companies could reach an agreement as early as mid-September, and Western Digital CEO David Goeckeler would run the combined firm.

* Samsung dominates with over a third of the NAND market, as per TrendForce. Kioxia has a nearly 19% share and Western Digital 15%.

* Earlier this year, Korean chipmaker SK Hynix Inc (OTC:HXSCL) won the European Commission approval for acquiring Intel Corp's (NASDAQ:INTC) Nand storage unit. In contrast, Britain reserves anticompetitive concern against NVIDIA Corp (NASDAQ:NVDA)-Arm Ltd deal.

* Other successful chipmaking deals include Advanced Micro Devices Inc - Xilinx Inc (NASDAQ:XLNX), and Analog Devices Inc (NASDAQ:ADI) - Maxim Integrated Products Inc (NASDAQ:MXIM).

* Price Action: WDC shares are down by 1.85% at $64.31 on the last check Thursday.