Western Digital to swap certain HDD assets with Toshiba, moves closer to Hitachi GST merger

By on February 29, 2012, 3:30 PM

Western Digital announced today that it has reached an agreement with Toshiba Corporation to divest certain hard drive manufacturing assets in order to meet the requirements of regulatory agencies reviewing the company's pending acquisition of Hitachi Global Storage Technologies. As part of the deal, Toshiba will acquire manufacturing and related intellectual property from Western Digital for 3.5-inch hard drives used in desktop PCs and consumer applications, as well as the firm's near-line storage unit for server applications.

Western Digital also announced that it has agreed, subject to completion of the divestiture transaction, to purchase Toshiba Storage Device Thailand (TSDT), a hard drive manufacturing facility that has not yet resumed operations after last year's floods in Thailand.

The company plans to integrate TSDT facilities and employees into its existing operations in Thailand. Financial terms of the agreements were not disclosed.

Western Digital announced plans to acquire Hitachi GST roughly a year ago in a cash and stock deal valued at $4.3 billion. If the merger completes, there will be only three major HDD manufacturers left in the world, with Western Digital and Seagate taking the lion's share of the business while Toshiba holds to a relatively small ~10% market share. Seagate completed its acquisition of Samsung's hard drive division late last year.

The news comes amid a busy last few months for hard drive manufacturers recovering from a series of floods that struck Thailand last year. It also follows an arbitration award in November ordering WD to pay Seagate a hefty $525 million in damages for allegedly coaxing "confidential information and trade secrets" from a former Seagate employee. Western Digital has denied those allegations and it plans to contest the ruling.

User Comments: 5

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Guest said:

The hard drive business has proved itself to be completely corrupt; I am severely disappointed.

RzmmDX said:

Guess I will also have to cross Toshiba HDD off my list.

spydercanopus spydercanopus said:

Hitachi drives have always been more reliable than the others. I've got some 10 year old drives that still chunk away at a steady pace. I hate to see consolidation, but that's capitalism.

Guest said:

It looks like you have to cross of toshiba and hitachi as well. Only fujitsu is left. Segate and western digital drives suck. They get corrupted easy and we are talking about hd not political ways though both are true. The only drives from wd i tolerate are raptors.

Guest said:

Its not the drives that get corrupted easily .. its the business mgrs. As for thats capitalism.. not in my book. there should be at least 3 and preferably more HD mfrs. Altho this does seem to indicate that these mfrs see very little future for spinny disks, the real competition being low cost SSD TLC maybe even octobit MLC (P/e cycles 1000)

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