3D NAND represents the most advanced memory product to date, achieving far greater capacites at lower productiion costs by stacking layers of NAND flash cells atop one another like microscopic skyscrapers.
All major producers of flash products have announced their own versions of 3D NAND, some denser than others. Intel announced yesterday that it will convert its fabrication facility in Dalian, China from making processor chips to making 3D-NAND flash chips.
Intel also plans to invest up to $5.5 billion in its 3D NAND project. The Dalian fab plant is scheduled to begin producing memory chips in the second half of 2016.
In its acquisition announcement, WD singled out the 15-year partnership between SanDisk and Toshiba, stating that it expects that relationship to be "ongoing."
"The [joint venture] provides stable NAND supply at scale through a time-tested business model and extends across NVM technologies such as 3D NAND," WD said.
While the WD and SanDisk data storage product portfolios do overlap slightly in that both companies sell enterprise SAS-based and PCIe-based SSDs, in general the buyout will increase the addressable market and provide revenue diversification for WD across multiple technologies and market segments, Janukowicz said.
Gregory Wong, an analyst with Forward Insights, said the deal allows WD to enter the consumer SSD and enterprise SATA SSD market.
"WD wants [SanDisk] for the access to the flash. Their PC HDD business is declining due to the weak PC market but also because SSDs are encroaching that space," Wong said. "Without access to NAND flash at cost, it would've been difficult for them to participate in that space and also would've increasingly been difficult to compete with NAND players in the enterprise space."
The NAND flash market grew rapidly over the past decade, but in the past few years, it has consolidated and growth has slowed because it can't support the many players.
Because there's little product overlap, the WD-SanDisk merger doesn't really add much in the form of market consolidation, Wong said.
"With this transaction, Western Digital will double its addressable market and expand its participation in higher-growth segments," Wong said.
WD said that Steve Milligan will continue to serve as CEO of the combined company, which will remain headquartered in Irvine, Calif.
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