Kioxia’s predecessor was Toshiba Memory, one of the most established Flash memory companies that has R&D institutions in Japan, the United States, the United Kingdom, Israel and India and produces NAND Flash memory chips for phones. Smartphones, server computers and many other devices. Currently, Kioxia is the second largest manufacturer of Flash memory chips in the world with a 20% market share, and it is also the only manufacturer remaining in Japan. If the acquisition goes through, it will mean that the Japanese warehouse has ended.
From Glory to Loneliness: The Japanese Memory Market
Essentially, the development of DRAM in Japan began at the same time as that in the United States, around 1972. At that time, Japan pioneered the successful development of 1 KB DRAM which was introduced to the market in same time as Intel’s DRAM, and they pioneered the invention of NAND Flash memory around 1987.
In 1976, led by the Japanese Ministry of International Trade and Industry with Hitachi, Mitsubishi, Fujitsu, Toshiba and NEC as the backbone, Japan invested some 72 billion yen in joint research for circuit manufacturing technology integrated. In 1980, the joint research and development organization VLSI of Japan announced the completion of a four-year project, the main research results of which include various types of electron beam exposure devices, d ‘plate making apparatus using ultraviolet rays and dry etching. devices.
The technical integration of several companies ensured that the rate of return of DRAM mass production was over 80%, far exceeding the 50% available to the United States at the time and providing an overwhelming cost advantage. , establishing the dominant position of Japan at that time. .
Subsequently, the Japanese industry successfully developed 1MB of DRAM, and Mitsubishi quickly introduced 4MB of DRAM technology. Hitachi began using a 1.5 micron process to produce DRAM, and by 1988 Toshiba’s monthly production capacity exceeded one million units. In the same year, the market share of Japanese companies reached almost 80%, and for a long time NEC, Toshiba and Hitachi were the three dominant companies on the world stage.
At the time, the DRAM market share in the United States was less than 20%, and tech startups like Intel and AMD were ousted from the throne by large Japanese companies. The US government realized it could lose its strategic command position in the computer industry, so they changed their trade policy towards Japan from support to containment, something similar to what they are doing now. with China.
In 1986, a 100% penalty was imposed on the $ 300 million worth of chips that Japan exported to the U.S. In September of that year, Japan and the U.S. signed an agreement containing a clause guaranteeing that Japan would open its market to the United States and that in five years this would allow the country to have a 20% market share in Japan.
Subsequently, the Korean storage industry profited from the situation, causing the Japanese semiconductor industry to decline sharply in the 1990s. By 2001, its share of the world market had lost half of the total. South Korea and Taiwan adopted a model of technological development that far surpassed Japanese technology, exerting very aggressive pressure on Japan.
Faced with this situation, the world’s leading semiconductor companies have taken countermeasures and initiated major strategic adjustments, cutting costs, moving their production lines overseas and outsourcing their activities. All of this led to a decline in the Japanese industry which ultimately left only Toshiba as a major member of the storage business since 2012. Elpida will file for bankruptcy.
If Kioxia sells, it will be the end of Japanese storage
Not long ago, Toshiba Memory became KIOXIA with the aim of promoting better branding, and as we have pointed out before, they are currently the second largest producer of flash memory in the world with a share of 20%. The interest of Micron Technology and Western Digital, although it is not confirmed, would make enough sense for both companies but it would certainly mean a very sad turning point for the Japanese industry, because as we have seen in point previous, it would have disappeared. to be world number 1 with 80% of the quota to disappear completely, and all because of pressure from other countries.
Of course, this supposed deal won’t be easy. In Japan, Kioxia is considered a mainstay of the industry and given the sensitivity of the transfer of ownership of key items such as chips, any transaction will require approval from the Japanese government. The United States can also play a key role in this regard, as it could intervene in favor of the potential transaction to promote its chip manufacturing capacity to improve its competitiveness with China.
If Kioxia were to be sold, it would not only mean the end of warehousing in Japan, but all of Japan’s business would be in the hands almost entirely of the United States and South Korea, producing a future showdown. very probable. In any case, they have already contacted Kioxia to ask them about this possible acquisition and they replied that they did not know anything about it, so for now it is pure speculation and nothing can be taken for granted. Either way, keep in mind that before an acquisition of this size took place, there was a lot of previous news popping up once one of the companies made a formal offer.
