BEIJING (Reuters) -Chinese chip assembly and testing firm JCET Group said on Monday it plans to buy an 80% stake in a Shanghai flash memory facility owned by Western Digital Corporation (NASDAQ:WDC) for about $624 million in cash.
SanDisk Semiconductor Shanghai makes products such as iNAND flash memory modules as well as SD and MicroSD components used in areas such as telecommunications, automobiles and consumer devices, JCET said in a filing.
Western Digital said last year it would spin off its flash memory business that had been grappling with a supply glut, after talks of merging the unit with Japan's Kioxia stalled.
The deal, pending Chinese regulatory approvals, will expand JCET's market share in the data storage industry, JCET said in its filing to the Shenzhen Stock Exchange.
Buying the stake will allow JCET to enhance its partnership with Western Digital, which has been a long-term client and is expected to continue to place orders at SanDisk Semiconductor Shanghai after the transaction, JCET said.