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Seagate To Acquire Samsung’s HD Unit

April 20, 2011 by  
Filed under Around The Net

Seagate Technology is to acquire Samsung Electronics  loss-plagued hard disk drive (HDD) business for $1.4 billion as it looks to battle rival Western Digital Corp and curb price wars that continue to damage the industry.

The deal comes a month after Western Digital sought to buy Hitachi Ltd’s hard disk drive division for $4.3 billion, to create a global leader with deep resources.

It is yet to be seen whether Western Digital trump Seagate as the world’s largest hard drive maker after the deals conclude. In 2010, Seagate’s sales was $11.4 billion while Western Digital posted revenue of $9.85 billion.

Toshiba Corp and Fujitsu are the other smaller players in the hard-drive space.

The sale of the HDD business will see Samsung leave the cut-rate industry and focus on its bread-and-butter memory-chip business.

The sector is already battling persistent sales-growth declines and now faces a longer-term threat from wireless tablet devices using more power-efficient flash drives, or solid-state drives (SSD).

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