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Samsung Electronics, the world's largest maker of dynamic random access memory and a major maker of NAND flash memory, reportedly plans to sell its hard disk drive (HDD) business in a bid to get rid of financial losses and concentrate on money-making businesses with better prospects.

Samsung reportedly plans to sell its hard drive business unit for $1.5 billion to Seagate Technology, reports the Wall Street Journal citing unofficial sources. Seagate should also be interested in such acquisition as it will be able to grow its market share significantly and better compete against Western Digital, which recently unveiled plans to acquire HDD business unit of Hitachi.

"Samsung is considering selling its HDD business as it is not strategic to succeed; [Samsung] is neither a follower or a leader in the business, and it's making a loss," said the person familiar with the matter. $1.5 billion seems a reasonable price to sell. It could even be sold for under $1 billion as Samsung is trying to get rid of it," the source reportedly said.

Samsung Electronics has seen its earnings decline recently; earlier this month, it gave a weak earnings estimate for the first quarter. Samsung, commanded about 11% share of the global hard disk drive market in the Q4 2010 and has been losing money with the business. A sale of the company's HDD business unit would help generate cash for reinvestment in promising business areas.

Rather than competing with companies like Seagate or WD on the market of traditional hard drives, which is growing slowly, it makes more sense for the company to compete on the market of solid-state drives (SSDs), which is growing rather rapidly.

Samsung and Seagate did not comment on the news-story.

Tags: Samsung, HDD, Seagate, Business, WD, Hitachi

Discussion

Comments currently: 3
Discussion started: 04/18/11 04:42:14 PM
Latest comment: 04/19/11 01:37:53 AM
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1. 
Sad to see Samsung exit the game.

Samsung drives are great, but so are WD and seagate are not too bad either.

Hard drives will be around for a while yet and as they increase in size so will there lifespan 4 to 6TB drives are not too far off and SSD cant even come close to price per GB
I dont see that changing anytime soon..

Right now 6TB's of SSD ( 3x 2TB SSD's ) cost around $30,000 dollars vs 6 TBs ( 3x 2TB Hard drives ) Cost $300 dollars!

Nuf said really.
0 0 [Posted by: vid_ghost  | Date: 04/18/11 04:42:14 PM]
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Same here. Love my Spinpoint F3 drives a lot
0 0 [Posted by: bulava  | Date: 04/19/11 12:48:35 AM]
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2. 
Wall Street Journal Sunday news..Arrg run to the hills...lol

But if Segate has any noodles they should get it at cheapest price possible as who would be another buyer and HDD parts are hard to get hold of at the minute due to earthquake.
0 0 [Posted by: efex  | Date: 04/19/11 01:37:53 AM]
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