Western Digital has announced its decision to split its hard disk drive and NAND memory businesses, creating two separate public companies. According to the company, the change is aimed at refining the focus and operational efficiency of each business segment. The separation, planned to be tax-free, is slated for completion in the second half of 2024, subject to necessary approvals and customary conditions.
Western Digital believes that this separation will allow each business unit — hard disk drives and NAND flash memory — to refine their strategic directions, focusing on unique market opportunities and technological innovations. By becoming independent entities, they can operate with enhanced efficiency, each with its own capital structure, allowing for more targeted and agile decision-making processes, according to the company's official rationale. This move is seen as a way to bolster each unit's position in the market, driving long-term success through focused strategies and operational efficiencies.
The decision follows a comprehensive strategic review, where various alternatives were evaluated to enhance organizational value and operational efficiency. As a result, Western Digital's board of directors decided that spinning off the company's flash memory business makes a lot of sense. Meanwhile, the company's announcements does not detail how exactly Western Digital plans to split product lineups and whether the new flash venture will retain all flash-based product lines (e.g. SSDs, flash drives), or will mostly focus on production of NAND memory.