The cyclical nature of the storage market contributes to constant price volatility, with manufacturers attempting to increase production volumes only when absolutely necessary to avoid being left with idle capacity during periods of market downturn. It is all the more interesting to know that Kioxia and Western Digital intend to set up another flash memory production line in northern Japan by next year.
Accordingly Reuters, the new line will be built on the site of an existing facility in Kitakami in northern Japan, its construction will require an investment of US$8.3 billion and will start in April this year and be completed next year. It is not yet clear how the investments will be divided between the participants in the joint venture. In such cases, the principle usually applies that those who pay more get more finished products.
Recall that Kioxia was formed through the efforts of a consortium of investors based on Toshiba’s former solid-state storage business. The Japanese company still owns about 40.6% of Kioxia’s shares but is considering selling it to resolve ongoing financial woes. Kioxia is preparing to enter the public stock market, but has not yet decided on the timing or terms of this move.