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Western Digital (WDC) & Kioxia Launch New 3D Flash Memory

Western Digital WDC and Kioxia Corporation have jointly introduced their latest 3D flash memory technology using advanced scaling and wafer bonding technologies. This technology is ideal for managing exponential data expansion and data-centric applications, such as smartphones, IoT devices and data centers.

The new 3D flash memory technology is the eighth-generation BiCS FLASH, which reportedly has the industry's highest bit density owing to its 218-layer 3D flash that leverages 1Tb triple-level-cell and quad-level-cell with four planes, highlighted Kioxia. This has helped the company to improve bit density by more than 50%, per a company report.

Additionally, it has a high-speed NAND I/O that operates at over 3.2Gb/s, up 60% over the prior generation. According to the company, it also offers a 20% improvement in write performance and read latency, speeding up overall performance and usability for consumers.

Western Digital Corporation Price and Consensus

Western Digital Corporation Price and Consensus
Western Digital Corporation Price and Consensus

Western Digital Corporation price-consensus-chart | Western Digital Corporation Quote

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Kioxia has already started shipping samples to limited customers. The successful engineering partnership between the two companies has resulted in significant advancements in 3D flash memory technologies.

The companies have continuously collaborated to decrease costs while enabling ongoing lateral scaling developments. The businesses designed the CBA (CMOS directly Bonded to Array) technology, which involves manufacturing each CMOS wafer and cell array wafer independently in its optimal state before bonding them together to produce increased bit density and quick NAND I/O speed, added the company.

In January, both companies engaged in advanced talks for a probable merger, reported Bloomberg. However, there was no official comment on the matter from either of the parties. As part of the deal, Western Digital is likely to spin off its flash unit and integrate it with Kioxia to create a new publicly trading company in the United States. This will be followed by a second listing in Japan.

The combined company would then have a major share of the global NAND flash market. Per a report from Mordor Intelligence, the NAND flash memory market is expected to reach $94.24 billion by 2027, registering a CAGR of 5.33% from 2022 to 2027.

Last year, the two companies had inked an agreement for jointly investing in the first phase of the Fab7 (Y7) manufacturing facility at Kioxia's state-of-the-art Yokkaichi Plant in the Mie Prefecture of Japan.

Western Digital is one of the leading hard disk drive producers globally, which are used in desktop PCs, servers, network-attached storage devices, video game consoles, etc.

The company’s performance is affected by weakening consumer demand owing to prevailing global macroeconomic uncertainties and rising inflation. Also, the company expects enterprise solid-state drive product demand to be affected as large cloud customers have entered the "digestion period."

At present, WDC carries a Zacks Rank #4 (Sell). Shares of the company have lost 23% compared with the sub-industry’s decline of 20.8%.

Zacks Investment Research
Zacks Investment Research


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Stocks to Consider

Some better-ranked stocks in the broader technology space are Arista Networks ANET, Perion Network PERI and Pegasystems PEGA, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.79 per share, rising 11.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 16.9% in the past year.

The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.

Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 70.5% in the past year.

The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, rising 101.5% in the past 60 days.

Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of the company have declined 43.1% in the past year.

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Western Digital Corporation (WDC) : Free Stock Analysis Report

Perion Network Ltd (PERI) : Free Stock Analysis Report

Pegasystems Inc. (PEGA) : Free Stock Analysis Report

Arista Networks, Inc. (ANET) : Free Stock Analysis Report

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