by Anton Shilov
12/19/2011 | 11:18 PM
Seagate Technology has announced the closing of the transaction to acquire the hard disk drive (HDD) business of Samsung Electronics. With the transaction complete, Seagate has all chances to become the largest HDD maker in the world.
Under the terms of the transaction, Seagate has gained select elements of Samsung’s HDD business, including assets, infrastructure and employees. These assets include Samsung’s leading M8 product line of high-capacity 2.5” hard disk drives. Samsung employees joining Seagate include a number of senior managers and design-engineering employees from Samsung's Korea facility, who will focus on development of small form-factor products for the mobile computer market.
According to analysts from IHS iSuppli, Seagate Technology’s buyout of Samsung Electronics' hard disk drive (HDD) business will considerably boost the newly merged entity’s overall standing, with combined shipments accounting for two-fifths (~40% or 261.2 million) of an HDD market worth 652.4 million units in 2010.
Based on final year-end figures from 2010, HDD shipments tallied from both Seagate and Samsung equated to 261.2 million units - enough to give the combined companies 40% of the HDD market, or a No. 2 finish for the year. Separately, Seagate’s shipment share in 2010 showed 195.2 million units, while Samsung’s HDD business brought in 66 million units.
Given that Western Digital, which is in process of taking over Hitachi GST, is ordered to spin off its HDD business by the European Commission, it is highly likely that Seagate will become the world’s largest HDD maker even after WD’s finalization of its deal with Hitachi.
“Together, Seagate and Samsung have aligned our current and future product development efforts and roadmaps in order to accelerate time-to-market efficiency for new products and position us to better address the increasing demands for storage. It is an exciting time in the industry with rapidly evolving opportunities in many markets including mobile computing, cloud computing, and solid state storage,” said Steve Luczo, Seagate chairman, president and chief executive.
This transaction was announced in April 2011 along with a series of other agreements between Seagate and Samsung. Seagate is supplying disk drives to Samsung for PCs, notebooks and consumer electronics devices. Samsung is supplying its NAND flash for use in Seagate’s enterprise solid state drives (SSDs), solid-state hybrid drives and other products. The companies have also extended and enhanced their existing patent cross-license agreement and have expanded cooperation to co-develop enterprise storage solutions.