Regulation has passed! Japanese companies adjust their strategies, and the $20 billion acquisition may face variables?
The merger of U.S. storage giant Western Digital with Japanese memory chip maker Armour Man has largely received regulatory approval. That's because Japan's semiconductor industry says the merger can be approved as long as cutting-edge technology remains in Japan.
However, the event, which involved a $20 billion deal, was opposed by South Korea's SK hynix.
I thought that Kaien would give up and acquire Western Digital, but what I didn't expect was that at the beginning of the year, they started negotiations with SK hynix again. At the same time, they also changed the negotiations"Formula"SK hynix does not negotiate verbally, but intends to implement it in a practical place.
According to people familiar with the matter, Pantsourman has made a proposal to SK hynix that if the latter agrees to the merger of Western Digital and Pantsour, SK hynix's 3D NAND will be licensed for production at a fab in Japan.
For SK Hynix, the Armorer's suggestion could further increase its 3D NAND production, thereby saving some of its own investment in building the plant. In addition, it will deepen the connection between the Armorers and SK hynix, thereby alleviating one of SK hynix's concerns that the merger will reduce SK hynix's influence over the Armorers. Overall, this practical advantage of the Armored Warrior is more powerful than that of SK hynix.
In this case, I think the $20 billion acquisition will also bring certain variables.
Many people overlook the true purpose of Armored Warriors to produce 3D NAND for SK hynix. At first glance, this is to help SK hynix expand its production capacity and deepen the order relationship between the two companies. In a way, this is a good deal for Kaien, after all, they have won such an important customer, and if successful, they can also finalize the merger and acquisition in the process, helping Kaien to increase its market strength. However, from another point of view, the Armored Knight program also points to the short-term development of SK hynix.
As we all know, under the continuous restrictions of the former United States, SK hynix's wafer production base in Chinese mainland is facing the dilemma of not being able to introduce the most advanced wafer manufacturing equipment. As far as SK hynix is concerned, the company has no intention of withdrawing its own production capacity from its Chinese plant, which will have a certain impact on the scale of SK hynix's future production capacity. At the same time, SK hynix has previously opted for other methods, such as using state-of-the-art manufacturing equipment to manufacture products at this stage, and then continue to ship the follow-up work back to the Chinese factory after shipping them back to the Korean site.
While the risk of damage to cutting-edge equipment has been reduced to a certain extent, SK Hynix has also faced the issue of increased costs. If ARMOR MAN can help SK Hynix produce plug-ins at this time, SK Hynix will be able to maintain deep ties with customers in continental Europe without compromising its own costs.
To put it simply, SK hynix has maintained its market share in the mainland at the same time, but without having to spend any more money and can even circumvent the restrictions by producing tablets using state-of-the-art equipment. That's why I say that the Armored Warriors' plan is a way to reduce SK hynix's existing market share. In order to reduce the impact of U.S. export controls on technical equipment as soon as possible, Armour Man is undoubtedly a boon for SK hynix. Because of this, the author believes that this acquisition is one of the reasons for the introduction of variables.
It has to be said that Japan's armored warriors are really well-intentioned, because this plan directly puts SK hynix in a passive situation. I don't know if SK hynix will ultimately consider its own opinion, or if it will consider the situation of the entire Korean semiconductor memory giant. In any case, in my opinion, it is better for SK hynix to maintain its position as a Korean company and lead the way for future growth opportunities.
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