Hitachi Global Storage Technologies (Hitachi GST) and Western Digital on Wednesday said that Hitachi GST would acquire substrate manufacturing facility located in Sarawak, Malaysia from Western Digital. The move comes about year after WD acquired the facility from Komag and is a result of WD’s decision to cut costs.

WD announced in December that it was taking actions to realign its cost structure to match a softer demand environment. This divestiture is one of those steps. The Sarawak facility, at which WD manufactured aluminum substrates for hard drive magnetic media, was acquired by WD as part of its acquisition of Komag in September 2007. WD is consolidating substrate operations from the Sarawak facility into its other substrate facility in Johor, Malaysia. WD will continue to manufacture the majority of its magnetic media requirements at existing facilities in Malaysia and source the balance of its media needs through its strategic external partners.

“This acquisition further strengthens Hitachi GST and is the next step in our business transformation. The Sarawak facility is located in close proximity to existing Hitachi GST suppliers and drive assembly operations, which will enable us to realize increased operational efficiencies and other long-term benefits,” said Steve Milligan, president of Hitachi GST.

The employees of WD at the facility will become employees of the purchaser. The transaction is expected to close in the current quarter, subject to customary closing conditions. Terms of the transaction were not disclosed.

“We are very pleased that, rather than closing this plant, which was surplus to our needs, we have identified a qualified buyer who will continue to operate the facility. WD worked closely with Hitachi GST, the government of Sarawak and its local agencies to create a solution that preserves operations at the Kuching location, as well as the jobs of the employees and those in supporting industries, which have a large impact on the local community,” said John Coyne, president and chief executive officer of WD.

Tags: Western Digital, Hitachi