Memory card, SSD, smartphoneflash memory may be everywhere, but that does not seem to be enough to bring happiness – and wealth – to Western Digital, which is announcing a radical change.
Several years of discussions and an aborted merger between Western Digital and Kioxia undoubtedly weighed in the recent decision taken by the management of the American company.
In the second half of next year, the separation of activities related to flash memory on the one hand and platter hard drives on the other should be effective. Two separate companies whose possible links we do not yet know.
Aborted merger with Kioxia
At the very end of last week, Western Digital and Kioxia announced that they were putting an end to the negotiations that they had been conducting for several years for the association of their flash memory activities.
In the process, the action of the American group Western Digital recorded one of its most formidable losses with a fall of 16% in the space of just a few hours. To make matters worse, in the last quarter, the company recorded a drop in its profit of around 26%, undoubtedly precipitating the decision of its main managers.
Over the next year, Western Digital will therefore make a radical change and split into two companies: one in charge of activities related to flash memory, the other focusing on the historic hard drive sector. trays. A split planned to be finalized during the second half of 2024.
Independence regained for Sandisk?
Remember that in 2016, Western Digital broke the bank to buy Sandisk – 16 billion dollars all the same – and thus take a clearer turn towards flash storage.
Seven years later, we are witnessing the opposite movement, even if the main leaders of the group are careful not to draw any negative conclusions. For David Goeckeler, CEO of Western Digital, “ both our HDD and flash businesses are well positioned to capitalize on significant market dynamics in the data storage industry “.
The boss adds that “ Given the current constraints, it has become clearer to the Board in recent weeks that implementing a separation is the appropriate next step “. In other words, everything is going well in the best of all possible worlds, but what was the best thing to do in 2016 must absolutely be undone in 2024.
The fact remains that the announcement was welcomed by the Stock Exchange: the Western Digital share price has essentially returned to its level before the confirmation of the end of negotiations between the group and the company Kioxia.
Source : Bloomberg, The Verge
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