by Anton Shilov
01/07/2003 | 06:57 AM
Hitachi announced official details about the joint venture between IBM and Hitachi called Hitachi Global Storage Technologies. The bigger part of the facts had already been posted before, however, it seems that now we should compile everything we know about the newly-formed HDD maker
Hitachi Global Storage Technologies is headquartered in San Jose, California. The new company is 70% owned by Hitachi, with the remainder of the shares held by IBM. Hitachi, however, will assume full ownership at the end of 2005. IBM will have no involvement in the management of Hitachi Global Storage Technologies.<%BANNER[article]%>
Hitachi and IBM reached a framework agreement in June last year under which Hitachi would purchase IBM's HDD operations for $2.05 billion. Since then, the two companies reached agreements regarding all related matters, including contracts for the supply of HDDs to IBM, treatment of intellectual property and the provision of services. Based on these agreements, and a revision in operating bases and personnel covered by this acquisition, the deal closed on December 31, 2002.
As an entity specializing in HDDs, Hitachi Global Storage Technologies will bring together the mutually complementary qualities of both its founding companies. Hitachi boasts powerful R&D capabilities, such as in perpendicular magnetic recording technology. Having invented the HDD, IBM has extensive technological expertise backed by an industry-leading number of patents, and top-level product development capabilities. With an expanded product lineup, increased production capacity, and enhanced global development, production and sales networks as a result of this integration, Hitachi Global Storage Technologies is in an extremely competitive position. Of course, the company may have to solve out quality and warranty issues, but they do not seem to be very tough for a big company.
The company will provide the most extensive line of HDDs in the industry, covering every major segment from consumer-focused 1-inch to enterprise-level 3.5-inch products. The worldwide sales and support capabilities of Hitachi Global Storage Technologies will provide customers with access to products and services. Since the new HDD manufacturer combines the strength of two companies, the rivals will face extremely aggressive competition from Hitachi’s new subsidiary.
Hitachi Global Storage Technologies commenced operations on January 1, 2003, integrating IBM's HDD production and marketing bases with Hitachi's US HDD sales division. On April 1, plans call for Hitachi, Ltd.'s Data Storage Systems Division, which operates an HDD manufacturing facility in Kanagawa Prefecture, to be integrated with the Japanese subsidiary of Hitachi Global Storage Technologies by taking advantage of Japan's corporate split law. Plans are also in hand for all Hitachi's HDD production and sales locations, including sales operations in Europe and Asia, to join Hitachi Global Storage Technologies.
Profile of the New Company (As of April 1, 2003):