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Samsung Sells HDD Business To Seagate

David Gilbert by

Samsung Sells HDD Business To Seagate

There is currently a major change taking place in the Hard Disk Drive (HDD) sector with mergers and acquisitions taking place left, right and centre.

Last month we saw Hitachi purchased by Western Digital (WD) for $4.3 billion dollars making WD by far the largest HDD manufacturer in the world. Today, we see that Seagate, which trails WD in second place, has purchased Samsung’s HDD business for $1.375 billion, made up of equal parts cash and shares. WD now holds around 50 percent of the market following its merger with Hitachi, while Seagate will jump from around 30 percent to a 40 percent share following the merger with Samsung. This will mean that 90 percent of the total HDD market will be controlled by Seagate and WD, which could lead to less competition and higher prices for consumers.

Of course, Samsung’s off-loading of its HDD market is seen as a sign that it wants to concentrate all its storage efforts on Solid State Drives (SSDs). While IHS iSuppli research earlier this year suggested that HDDs would continue to flourish for the next few years, there is no doubt that SSDs are the future and only price will prevent them from becoming more widespread. As part of the Seagate deal, Samsung will get a 9.6 percent stake in the company and be allowed to nominate one executive to sit on Seagate’s Board of Directors. More interestingly however, the agreement also sees enhanced cross-licensing agreements and a NAND flash memory supply agreement, whereby Samsung will supply it flash memory for Seagate’s SSDs. Conversely, Seagate will supply Samsung with HDDs for its laptops and PCs.

The deal is one which is obviously good for both of these companies but in general terms, it may lead to a lack of competition which in the technology world is never a good thing.

Source: Seagate

Go to comments

KiretoX

April 19, 2011, 6:02 pm

That sucks. Seagate has bought HITACHI, now Samsung HDD division... soon there will be only WD and Seagate (aside ExcelStor) and prices will go up, quality and speed will go down :( Totally sucks.

Chocoa

April 19, 2011, 7:41 pm

I always rated and bought Samsung HDD's and worry that this will dilute the quality available and naturally competition ( till SSD come good)

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BTW the login sucks guys and is a PITA as I can no longer "remember" it ( the login credentials) in Opera, or the site...
Changes need!
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Enigma

April 19, 2011, 11:01 pm

"While IHS iSuppli research earlier this year suggested that HDDs would continue to flourish for the next few years,..."

No surprises there given that the HDDs have a massive capacity and price differential per GByte over the SSD, SD-cards and USB sticks.

Of course this time span could all get significantly shorter with the major SS memory manufacturers like Hitachi and Samsung focusing their effort on SSDs etc. Has to be the case to recoup the lost revenue from the lost market share!!!

Any anti-competitive behaviour on the parts of HDD manufacturers will only serve to hasten their demise given the obvious inherent superiorities of the SSDs.

Here's what I said a few weeks ago on this subject:

http://www.trustedreviews.com/newscomments/Seagate-GoFlex-Slim-Is-World-s-Thinnest-HDD

http://www.trustedreviews.com/newscomments/First-Rewritable-Blu-ray-XL-Disc-Shipping-This-Month

http://www.trustedreviews.com/newscomments/Intel-320-SSDs-Offer-Higher-Capacity-And-Lower-Prices

Tosh PLEASE put the BD out of our misery.

ThaDon

April 19, 2011, 11:37 pm

Isn't there some sort of competition commission out there who can stop this duopoly from screwing customers over with higher prices for (arguably soon-to-be) inferior products?

It's almost like Samsung WANT people to leave the HDDs behind and switch to flash, as the two remaining giants really polarize people's opinion regarding the build quality and reliability of their products..

A sad day indeed..

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