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Seagate to buy Samsung HDD business

by on19 April 2011

Confirms $1.37 billion deal
Seagate has officially announced a deal to acquire Samsung’s HDD business for $1.37 billion. Seagate will make half of the payment in cash, while the other half will be made in stock, which will give Samsung a 9.6 percent share in Seagate.

This is a rather interesting development, as Seagate will end up with a somewhat higher market share, while at the same time Samsung, a major producer of flash memory will end up with a sizable chunk of Seagate. Hence, under the deal Seagate will continue to supply Samsung’s ever growing needs for HDD storage, while Samsung will return the favor with flash supplies, so we can probably expect to see Seagate SSDs packed with Samsung chips in the future.

However, it will take some time before the deal is finalized and analysts expect it to be formally closed by the end of the year.

Western Digital will still remain the largest HDD maker on the market. Last month the outfit acquired Hitachi’s HDD business for $4.3, ensuring the top slot for years to come. As a result, the industry will end up with just three hard drive makers.

Toshiba is still soldiering on in third place and we can only guess whether it will choose to sell its hard drive business like Hitachi and Samsung. This would result in a new tech duopoly, much like the ones we have today in the CPU and GPU arena.

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