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Western Digital (WDC), Kioxia Invest to Enhance Memory Output

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Western Digital Corp. WDC recently inked an agreement with Kioxia Corporation for jointly investing in the first phase of the Fab7 (Y7) manufacturing facility at the latter’s state-of-the-art Yokkaichi Plant in the Mie Prefecture of Japan.

Kioxia is an industry pioneer and global leader in memory solutions in flash memory and solid-state drives (SSDs). Kioxia helps meet the surging demand for high-performing, large-capacity storage and data processing. Kioxia has fueled the technological evolution of flash memory from its invention of NAND flash memory in 1987. Kioxia's innovative 3D flash memory technology, BiCS FLASH, is driving the future of storage in high-density applications, including advanced smartphones, PCs, SSDs, automotive and data centers.

Benefits of the Joint Investment

Due to technological innovations, the amount of data being generated, stored, and used worldwide has increased exponentially. With this, the demand for memory products has also been skyrocketing. Amid this scenario, the companies are highly optimistic about further deepening their strategic partnership. The latest joint-venture investment adds a sixth flash memory manufacturing facility to the Yokkaichi Plant, augmenting its status as the world's largest flash memory manufacturing site. As a result of the investment, the production of cutting-edge products in Kioxia’s Fab7 facility will continue to meet the increasing demand for memory worldwide.

Apart from being a win for the flash memory market, the investment underpins the achievement of another historic milestone in the 20-year strategic joint-venture partnership between Western Digital and Kioxia.

The companies plan to utilize their existing technological partnership and economies of scale to develop and produce industry-leading semiconductor products to drive corporate growth.

With the construction of the first phase of the Y7 plant already concluded, the latest joint investment will enable initial production output from the fall of this year. The first phase of the Y7 facility will manufacture 3D flash memory, including 112- and 162-layer and future nodes.

For Western Digital, this joint investment in Y7 enhances its fruitful relationship with Kioxia and underscores the company’s commitment to meeting customers' memory and storage needs. The company looks forward to driving long-term success in collaboration with Kioxia.

In fact, Western Digital and Kioxia plan to continue to optimize synergies through joint investment and joint development of 3D flash memory to align with emerging market trends. This will also help bolster their respective competitiveness and leadership in the memory space.

WDC - A Leading Storage Device Stock

Headquartered in San Jose, CA, Western Digital is witnessing robust demand from cloud customers and recovering enterprise and video and image application markets. Strong demand for 18-terabyte (TB) and 20TB energy-assisted drives and enterprise SSDs is expected to drive the top line going ahead. Demand for the WD Black product line is also gaining traction due to gamers’ preference for more customized solutions. Further, encouraging PC shipment trends led by surging demand for notebooks are likely to support the company’s hard disk drive business.

Recently, Western Digital and Samsung Electronics Co., Ltd. signed a memorandum of understanding to unify standards around several advanced storage technologies, beginning with zoned storage solutions. Per the deal, the companies will collaborate to standardize and push the adoption of next-generation data placement, processing and fabrics storage technologies. Samsung and Western Digital will initially focus on creating a robust and broad ecosystem for Zoned Storage solutions for users and application developers and standardizing this technology.

Shares of WDC have dropped 32.2% in the past year compared with the industry’s fall of 9.4%.

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Zacks Rank & Key Picks

WDC carries a Zacks Rank of 3 (Hold) currently.

Some better-ranked stocks from the broader technology space include Bel Fuse BELFB, American Software AMSWA and Iridium Communications IRDM. While Bel Fuse sports a Zacks Rank of 1 (Strong Buy), American Software and Iridium carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bel Fuse has a projected earnings growth rate of 3.65% for 2023. The Zacks Consensus Estimate for Bel Fuse’s 2023 earnings has remained unchanged in the past 30 days.

Bel Fuse’s first-quarter 2022 earnings per share are estimated at 22 cents, suggesting year-over-year growth of 195.65%. Shares of BELFB have dropped 9.8% in the past year.

American Software has a projected earnings growth rate of 24.24% for fiscal 2022. The Zacks Consensus Estimate for American Software’s fiscal 2022 earnings has been revised upward by 4 cents in the past 60 days.

American Software’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 92.14%. Shares of AMSWA have declined 7.1% in the past year.

Iridium has a projected earnings growth rate of 157.14% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by 2 cents in the past 60 days.

Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met the same twice, the average surprise being 39.4%. Shares of IRDM have rallied 5.3% in the past year.

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Western Digital Corporation (WDC) : Free Stock Analysis Report

Iridium Communications Inc (IRDM) : Free Stock Analysis Report

Bel Fuse Inc. (BELFB) : Free Stock Analysis Report

American Software, Inc. (AMSWA) : Free Stock Analysis Report

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