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Samsung gets to keep its memory crown while rival merger falls apart

Business
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Last updated: October 22nd, 2021 at 07:23 UTC+01:00

Samsung’s title of the world’s largest NAND flash memory manufacturer will remain unchallenged for the time being. Namely, while the merger of its two largest rivals — Japanese Kioxia and California-based Western Digital — seemed like a done deal this summer, the said consolidation now appears to be falling apart.

Sources close to the two companies claim the merger talks have been at an impasse for some time now. The underlying causes citied as the reasons for the deadlock are multifaceted and deeply rooted. E.g., valuation disagreements and regulatory approval concerns are the leading issues behind the standstill, making it likely that this will be the end of Kioxia’s elongated acquisition attempt. No matter the reasons, this is a great outcome for Samsung.

Even combined, Kioxia and WD wouldn’t overtake Samsung overnight

According to Statista, Samsung currently controls just over a third of the world’s NAND flash memory market, at 34%. Meanwhile, industry data for the second quarter of the year puts Kioxia and Western Digital’s shares at 18.3 and 14.7 percentage points, respectively. Meaning that even combined, these two wouldn’t manage to dwarf Samsung. At least not immediately.

The medium-term picture is a whole different matter. Logistics aside, combining their sales and R&D departments would certainly allow the two companies to eventually challenge Samsung’s market dominance. Of course, that’s assuming WD and Kioxia’s merger wouldn’t bleed value, which is a big “if”. Because big-business mergers tend to do just that, particularly so in the tech sphere.

Besides, it’s not like Samsung was resting on its laurels while its largest rivals were plotting to join forces. The South Korean giant has been doing everything it can to maintain its momentum in the NAND space through aggressive investments in both logistics and R&D.

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