Storage giants huddle together for warmth! Japan's Kamen Rider and Western Digital merge their storage businesses, reaching an agreement before August.

In the midst of the semiconductor storage market's winter chill, Japan's third and fourth largest flash memory manufacturers, Kamen Rider and Western Data, have decided to join forces to keep warm. After months of negotiations, they plan to reach an agreement on merging their flash memory businesses by August.

According to Bloomberg, Western Data's flash memory business will be split off tax-free and merged with Kamen Rider. Western Data will hold slightly more than 50% of the merged entity's shares, and Kamen Rider executives will be responsible for its day-to-day operations, with Western Data executives also involved. The merged entity will be registered in Japan and is initially planned to be listed on the NASDAQ, but will eventually be listed in Tokyo.

According to a previous report by Business Korea, the reason for the accelerated merger negotiations between Kamen Rider and Western Data is that both companies have been experiencing poor earnings. Kamen Rider reported a loss of 171.4 billion yen (approximately 1.3 billion USD) in the first quarter of this year, while Western Data announced a loss of 570 billion Korean won (approximately 427 million USD).

Since June 2022, NAND flash memory prices have been declining, leading both companies to reduce overall NAND flash memory production by 30%. Kamen Rider and Western Data have been competing with each other for many years, and the merger of their storage businesses will also help them compete against Samsung Electronics.

According to market research firm TrendForce, as of last year, Kamen Rider had a 18.3% market share in the global NAND flash memory market, while Western Data accounted for 13.4%, ranking third and fourth, respectively.

The combined market share of these two companies is 31.7%, which is close to the current market leader Samsung Electronics (33.4%), while SK Hynix has a market share of 18.5%, ranking second. This means that the NAND flash memory market will shift from being dominated by the two Korean storage giants to a three-way competition involving the United States and Japan.

However, Bloomberg also pointed out that the final agreement on the merger has not yet been reached, and the timeline may change, or the negotiations may still end without an agreement. In addition, this transaction may also face challenges in terms of regulatory approval.