Japanese government gifts $1bn to Kioxia and Western Digital

The two firms have been running a joint venture for around 20 years. It comprises two factories that produce NAND flash memory near the Japanese cities of Yokkaichi and Kitakami. Now the Japanese government wants to increase domestic production of flash memory at these sites to position the country to meet the expected demand for generative AI and data centre applications.

It has pledged USD 1 billion in subsidies to add to the expected USD 4.9 billion investment from Kioxia and Western Digital. The two firms plan to manufacture flash memory chips comprising 218 layers, with shipments to begin in September 2025.

"With this subsidy, we will continue to contribute to the advancement of the semiconductor industry and the development of local and domestic economies," Kioxia president and CEO Nobuo Hayasaka said in a statement.

News reports have also suggested that the cancelled merger between Kioxia and Western Digital could be back on again. The deal stumbled thanks to the ownership issues involving memory rival SK hynix. However, there is speculation that talks are now underway to reassess the deal.