Western Digital Corp. on Monday announced that it has completed a $65 million cash acquisition of SiliconSystems, a supplier of solid-state drives (SSDs) for the embedded systems market. By acquiring SiliconSystems, WD officially enters the market of flash-based drives.

“The combination will be modestly accretive to revenue and margins as a result of SiliconSystems' existing position as a trusted supplier to the well-established $400 million market for embedded solid-state drives. SiliconSystems' intellectual property and technical expertise will significantly accelerate WD's solid-state drive development programs for the netbook, client and enterprise markets, providing greater choice for our customers to satisfy all their storage requirements,” said John Coyne, president and chief executive of WD.

Since its inception in 2002, SiliconSystems has sold millions of SiliconDrive products to meet the high performance, high reliability and multi-year product lifecycle demands of the network-communications, industrial, embedded-computing, medical, military and aerospace markets. These markets accounted for approximately 33% of worldwide solid-state drive revenues in 2008. SiliconSystems' product portfolio includes solid-state drives with Serial ATA, Parallel ATA, PC Card, USB and CF interfaces in 2.5”, 1.8”, CF and other form factors. SiliconSystems has developed extensive intellectual property to address the stringent embedded systems market requirements to ensure data integrity, eliminate unscheduled downtime, protect application data and software and provide for data security and protection through its patented and patent-pending PowerArmor, SiSMART, SolidStor and SiSecure technologies.

Integration into WD begins immediately, with SiliconSystems now becoming known as the WD solid-state storage business unit, complementing WD's existing branded products, client storage, consumer storage and enterprise storage business units. SiliconSystems' intellectual property and technical expertise will provide additional building blocks for future products to address emerging opportunities in WD's existing markets.

"WD's strong balance sheet, sales reach, and operations and logistics capabilities will allow us to greatly accelerate our penetration of our existing markets, while combining our engineering expertise with WD will enable us to develop new solid-state drives to broaden our overall product portfolio and address the emerging applications for solid-state storage in WD's existing customer base," said Michael Hajeck, a founder and chief exec of SiliconSystems, now senior vice president and general manager of WD's SSD business unit.

Tags: WD, SiliconSystems, SSD