Following its failed merger attempt with Kioxia, Western Digital has made the decision to split into two independent companies. Each of them will deal with its two main business divisions, dedicated respectively to its storage units and NAND memory. Both companies will be public, so they will be listed on the stock exchange.
This change is being carried out, according to the company, to focus focus and efficiency on operations in each of its two divisions. The division is planned to be tax-free, and if all goes as planned, the transaction will be completed during the second half of 2024.
With the division, Western Digital believes that each of its areas will be able to adjust its strategic directions, focusing only on its market opportunities and technological innovations related to its sector. By becoming independent entities, they can operate more efficiently, each with its own capital structure. In this way they will make their decision-making processes more agile, and boost the position of each division in the market.
The decision has been made following an exhaustive strategic review of the company, during which several alternatives have been assessed to improve its value as an organization, as well as its efficiency in operations. The decision made, for its board, is the one that makes the most sense.
For now, however, the announcement of its division has not been accompanied by more information about the process from Western Digital. It is also not known if the new company dedicated to flash memory will also keep all the products based on this technology that it manufactures, such as SSD units or flash drives, or if it will focus only on NAND memory.
David Goeckeler, CEO of Western Digitalhas pointed out that its HDD and flash areas “are well positioned to take advantage of the dynamics of the data storage sector market, and as independent companies, each will have its strategic focus and resources to seek opportunities in their markets,” further pointing out that “in recent years” they have improved “the operational efficiency of each division, including the creation of two business units of flash and HDD products, and separating the operational capabilities of each«.
