Kioxia and Western Digital’s Joint Venture To Receive Up To 150 Billion Yen Government Subsidy for Yokkaichi and Kitakami Plants

Rhea-AI Summary

Kioxia Corporation and Western Digital Corporation have received a 150 billion yen subsidy from the Japanese government for their joint venture manufacturing facilities at Yokkaichi and Kitakami plants to produce the latest generation of 3D flash memory and future generation advanced nodes. This is the second time the facilities have received this subsidy, with the previous one being up to 92.9 billion yen in 2022. The companies plan to continue enhancing the development and production capabilities of cutting-edge flash memory in Japan and contribute to the development of semiconductor-related industries and talent.

Financial Analyst

The announcement of a 150 billion yen subsidy for Kioxia Corporation and Western Digital Corporation's joint venture represents a significant financial injection into their semiconductor manufacturing capabilities. The subsidy is likely to bolster the financial position of both companies, potentially leading to increased capital expenditure in cutting-edge technology. This move could enhance their competitive edge in the 3D flash memory market, a sector that is critical for a wide range of technologies including smartphones, SSDs and data centers.

From an investor's perspective, this news may signal a positive outlook for the companies' future earnings potential and stock valuations. The sustained government support could translate to improved production efficiencies and cost savings in the long run. However, investors should also consider the potential risks of overreliance on government subsidies and the impact of geopolitical tensions on the semiconductor supply chain.

Market Research Analyst

The semiconductor industry is facing a surge in demand coupled with supply chain constraints. The subsidy's aim to secure stable semiconductor production in Japan is a strategic move to mitigate these challenges. For Kioxia and Western Digital, this financial support may accelerate the development of advanced nodes and wafer bonding technology, which are essential for next-generation 3D flash memory.

It is important to monitor how this subsidy impacts the global market share of these companies, especially against competitors in South Korea and the United States. The development of semiconductor-related industries and talent in Japan could also lead to a more robust ecosystem, potentially benefiting the broader industry and related sectors. Market analysts will be keen to observe the ripple effects of this investment on supply dynamics and pricing in the memory market.

Technology Analyst

The adoption of wafer bonding technology and advanced nodes in semiconductor manufacturing is a technical leap forward, promising greater storage capacities and faster speeds for 3D flash memory. This subsidy is a testament to the importance of continuing innovation in the NAND flash industry, where Kioxia and Western Digital are key players.

For the industry at large, the advancements in flash memory technology could lead to more sophisticated consumer electronics and enterprise storage solutions. However, the technical complexity of these innovations requires significant R&D investment. The subsidy could help mitigate these costs, potentially leading to a faster time-to-market for new products and technologies. It is critical to assess whether these advancements will be sufficient to meet the ever-increasing performance demands of data-driven applications.

TOKYO & SAN JOSE, Calif.--(BUSINESS WIRE)-- Kioxia Corporation and Western Digital Corporation (NASDAQ: WDC) announced today that their joint venture manufacturing facilities at Yokkaichi and Kitakami plants have been approved to receive an up to 150 billion yen subsidy, including facilities that will produce its latest generation of 3D flash memory based on the innovative wafer bonding technology and future generation advanced nodes. The subsidy will be granted under a designated government program aimed at facilitating corporate investment in cutting-edge semiconductor production facilities and securing stable production of semiconductors in Japan. This marks the second time that Kioxia’s and Western Digital’s joint venture manufacturing facilities are receiving this subsidy from the Japanese government. Previously, the joint venture manufacturing facility at Yokkaichi was approved to receive up to 92.9 billion yen subsidy from the Japanese government in 2022.

Leveraging an over 20-year joint venture partnership, Kioxia and Western Digital will continue to enhance the development and production capabilities of cutting-edge flash memory at the Yokkaichi and Kitakami plants in Japan. In addition, the two companies will contribute to the development of semiconductor-related industries and talent.

“We appreciate the support of the Japanese government and will continue to produce cutting-edge flash memory, which is indispensable for technologies that underpin the expanding digital transformation of society. With this subsidy, we will continue to contribute to the advancement of the semiconductor industry and the development of local and domestic economies,” said Nobuo Hayasaka, President and CEO of Kioxia.

David Goeckeler, CEO of Western Digital said, “We thank the Japanese government for their ongoing and unwavering commitment to our joint venture flash memory manufacturing facilities in Japan and our long track record of innovations in the NAND flash industry. This support recognizes the important role of advanced memory and data storage technologies in addressing a diverse and growing set of data-driven applications.”

Kioxia and Western Digital have the longest and most successful joint venture partnership in the semiconductor industry, creating category-defining products such as the 3D flash memory.

About Kioxia

Kioxia is a world leader in memory solutions, dedicated to the development, production and sale of flash memory and solid-state drives (SSDs). In April 2017, its predecessor Toshiba Memory was spun off from Toshiba Corporation, the company that invented NAND flash memory in 1987. Kioxia is committed to uplifting the world with memory by offering products, services and systems that create choice for customers and memory-based value for society. Kioxia's innovative 3D flash memory technology, BiCS FLASH™, is shaping the future of storage in high-density applications, including advanced smartphones, PCs, SSDs, automotive and data centers.

About Western Digital

Western Digital is on a mission to unlock the potential of data by harnessing the possibility to use it. With Flash and HDD franchises, underpinned by advancements in memory technologies, we create breakthrough innovations and powerful data storage solutions that enable the world to actualize its aspirations. Core to our values, we recognize the urgency to combat climate change and have committed to ambitious carbon reduction goals approved by the Science Based Targets initiative. Learn more about Western Digital and the Western Digital®, SanDisk® and WD® brands at www.westerndigital.com.

©2024 Western Digital Corporation or its affiliates. All rights reserved. Western Digital, the Western Digital design, the Western Digital logo are registered trademarks or trademarks of Western Digital Corporation or its affiliates in the US and/or other countries. All other marks the property of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240205717067/en/

Kioxia Contacts:

kioxia-hd-pr@kioxia.com

Western Digital Contacts:

Investors: investor@wdc.com

Media: WD.Mediainquiries@wdc.com

Source: Western Digital Corporation

What subsidy did Kioxia and Western Digital receive for their joint venture manufacturing facilities in Japan?

They received a 150 billion yen subsidy from the Japanese government.

What type of memory will be produced at the Yokkaichi and Kitakami plants?

The facilities will produce the latest generation of 3D flash memory and future generation advanced nodes.

How much subsidy did the facilities receive previously?

The facilities previously received up to 92.9 billion yen subsidy in 2022.

What are Kioxia and Western Digital's plans for the development of flash memory in Japan?

They plan to continue enhancing the development and production capabilities of cutting-edge flash memory and contribute to the development of semiconductor-related industries and talent.