To complete the previous post :SEC fillingsWDC annual report...

To complete the previous post :

SEC fillings
WDC annual report 2020

https://sec.report/Document/0000106040-20-000049/

Ventures with Kioxia

We and Kioxia currently operate three business ventures in 300-millimeter flash-based manufacturing facilities in Japan, which provide us leading-edge, cost-competitive flash-based memory wafers for our end products.

Through Flash Partners Ltd., Flash Alliance Ltd., and Flash Forward Ltd., which we collectively refer to as Flash Ventures, we and Kioxia collaborate in the development and manufacture of flash-based memory wafers using semiconductor manufacturing equipment owned or leased by each of the Flash Venture entities.

We hold a 49.9% ownership position in each of the Flash Venture entities.

Each Flash Venture entity purchases wafers from Kioxia at cost and then resells those wafers to us and Kioxia at cost plus a small mark-up.
We are obligated to pay for variable costs incurred in producing our share of Flash Ventures’ flash-based memory wafer supply, based on our three-month forecast, which generally equals 50% of Flash Ventures’ output. In addition, we are obligated to pay for half of Flash Ventures’ fixed costs regardless of the output we choose to purchase.
We are also obligated to fund 49.9% to 50% of each Flash Ventures entity’s capital investments to the extent that Flash Ventures entity’s operating cash flow is insufficient to fund these investments.
We co-develop flash technologies (including process technology and memory design) with Kioxia and contribute IP for Flash Ventures’ use.

The agreements governing the operations of the Flash Venture entities also set out a framework for any investment by the joint venture partners in flash manufacturing capacity.
Since its inception, Flash Ventures’ primary manufacturing site has been located in Yokkaichi, Japan. The Yokkaichi site, which is owned and operated by Kioxia, currently includes five wafer fabrication facilities. We have jointly invested, and intend to continue to jointly invest, with Kioxia in manufacturing equipment for the Yokkaichi fabrication facilities.

In May 2019, we entered into additional agreements to extend Flash Ventures to a new wafer fabrication facility, known as “K1.” Located in Kitakami, Japan, K1 is operated by Kioxia Iwate Corporation, a wholly owned subsidiary of Kioxia. The primary purpose of K1 is to provide clean room space to continue the transition of existing flash-based wafer capacity to newer technology nodes.
Output from the initial production line at K1 began in the third quarter of fiscal year 2020.
Meaningful output from K1 is not expected to begin until the end of calendar year 2020.For a discussion of risks associated with our business ventures with Kioxia, see Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K.


The K1 project.

https://investor.wdc.com/node/21321/html



K1 FACILITY AGREEMENT
CERTAIN CONFIDENTIAL PORTIONS HAVE BEEN REDACTED FROM THIS EXHIBIT BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. INFORMATION THAT HAS BEEN OMITTED HAD BEEN IDENTIFIED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***]”.


From all WD documents avaible on the SEC site, The K1 Agreement is certainly the most "redacted" one (Redacted = part of the text being omitted for confidentiality reasons)
=> The K1 project seems to be very confidential


Here are the actual owners of Kioxia



Note that - to take control of 49% of Toshiba Memory Corp (Kioxia) - Bain Capital established not one SPAC but four SPAC under the name of BPCE Pangea Cayman in Cayman Island.
It could be that each SPAC represent the respective interests of APPLE, SK Hynix, Seagate and ???

This is interesting because it could mean that :
- Each company in the consortium individualy owns a part of Kioxia
- Each company could individualy choose to whom they will sell their share in Kioxia capital.

Of course, we don't know the terms of their agreement, but the simple fact that they split the consortium into four different vehicules is an indication that they want all options to be open for the next phase of consolidation that is about to happen.

Also note that Prime Impact Capital - The SPAC established by former boss and top executives of HGST (then of WDC) - is also based in Caiman Island.
Sandisk, WDC, Mircron also have subsidiaries in Cayman Island

It seems that any company that wants to make serious confidential business must be there.

Anyone planning to visit Caiman Island ?












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