Report: Samsung to sell HDD business, Seagate interested

By on April 18, 2011, 8:00 AM
Samsung Electronics is pondering a sale of its loss-making hard disk drive unit to invest in other areas of growth, according to a report on the Wall Street Journal. Citing "a person familiar with the matter," the paper claims Samsung wants to get as much as $1.5 billion in the sale but may take less than $1 billion. Interestingly, a potential buyer for the business is the world's second largest hard disk vendor, Seagate Technology.

It was just a few months ago that Seagate was looking for a buyer in an attempt to take its business private. But after dropping those plans to start a $2 million buyback of shares, it looks like the company is now ready to expand its market share by making an acquisition of its own. Samsung held about a 10.7% share of the global hard disk drive market in the last quarter. An acquisition would put Seagate in a stronger position against current leader Western Digital, which recently agreed to buy Hitachi GST for $4.3 billion, and further distance it from third place Toshiba/Fujitsu.

Samsung is the world's biggest maker of memory chips and LCD televisions so it's money could be better spent in those areas. The company also recently announced a joint venture with U.S.-based biopharmaceutical firm Quintiles Transnational Corp., as part of a plan to diversify away from consumer electronics.

At this point neither Samsung nor Seagate have confirmed any acquisition talks. The deal would still have to go through antitrust authorities as usual, but given the green light, it would produce two nearly equally matched manufacturers, Seagate and Western Digital with almost half of the HDD market each, while Toshiba takes the remaining 10%.



User Comments: 7

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madboyv1, TechSpot Paladin, said:

This report/rumor is quite disheartening as I like Samsung drives very, very much.

Arris Arris said:

Yeah, I'd buy another Samsung drive (that I don't need) just to save them from selling to Samsung. Worth starting a movement. Buy a drive, save Samsung Spinpoint drives!

n00bzZy said:

That's too bad, seemed like their SpinPoint series was going well. Personally I got a couple 1TB F3's, pretty good for now.

Guest said:

That's a shame. I thought the Spinpoint series was doing well for them, but I do say this right after buying several Caviar Blacks for our office.

Then again, Dell likes using Seagates, so maybe some of that quality will end up there if Seagate buys Samsung's HDD division.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

As much as I love Samsung drives, this is a pretty smart move on their part. SSD tech is where most of the growth and profit is for the near future. As current HDDs get bigger and cheaper, the profit margins drop and demand experiences a reduction as single drives can now handle the capacities that required multiple drives in the past.

madboyv1, TechSpot Paladin, said:

Guest said:

That's a shame. I thought the Spinpoint series was doing well for them, but I do say this right after buying several Caviar Blacks for our office.

Then again, Dell likes using Seagates, so maybe some of that quality will end up there if Seagate buys Samsung's HDD division.

or, Seagate will continue tradition and continue making the spinpoint line but making it worse and worse with every iteration until it is fully absorbed into the seagate line. That is essentially what happened when they bought Maxtor 5 years ago, though Maxtor drives did not have far to fall lol.

HaMsTeYr HaMsTeYr said:

Ugh. Thats horrible news. I'm a Samsung Drive person and this is just possibly the worst news i've heard. Ever since Seagate's Acquisition of Maxtor, every one of my seagate drives died no less than maybe 2-3 years after purchase. All that data lost.

Ever since then I had a loathing for Seagate. They used to be at the top of their game but their quality is less than lackluster now and its so depressing.

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