Following the disintegration of the Kioxia merger, Western Digital, the U.S. data storage company worth $21 billion, will be splitting into two separate businesses, a flash memory company and a hard drive unit, by the second half of 2024.

After it was announced it was courting Kioxia, Western Digital saw shares spiral down 16%, but after the news of the business splitting was made public, the shares rebounded by shooting up 10%.

Activist investor Elliott Management had been urging the company to split since earlier in the year and now after Western Digital has done such, the data storage player said the move will “unlock significant value” for investors.

Further, the data storage business said it will “also provide strategic optionality for both businesses”.

According to David Goeckeler, Western Digital’s chief executive, separating their flash business was “the best executable alternative at this time”, after assessing “material opportunities for each of our businesses”.

“Given current constraints, it has become clear to the board in recent weeks that delivering a standalone separation is the right next step in the evolution of Western Digital,” he stated.

The company has made the move at a time when the trading environment in the memory chip market has shifted positively after an extended decline caused stock to pile up over the industry.

Goeckeler, who once worked for Cisco as an executive, has a track record of success and is seeking to steady the company’s value by interrupting dividends, paying down balances, cutting jobs, and straightening out a tax dispute.

Elliott Management supports Western Digital’s choice to split business because it’s a “value-accretive transaction that would enable both HDD and Flash [businesses] to take full advantage of their industry leadership positions as storage demand normalises”.