Toshiba acquires Fujitsu’s HDD business

February 17, 2009 By: TechToyer Category: CORP TALK

fujitsu1toshibaCORP TALK: Toshiba Corporation and Fujitsu Limited reached an agreement to transfer Fujitsu’s hard disk drive (HDD) business to Toshiba with the aim to complete the transaction in the fiscal first quarter of 2009. Toshiba will acquire an estimated 80% stake in a new subsidiary within Toshiba, while Fujitsu will hold the remaining 20% over some time to ensure a smooth transition.

With the transfer of Fujitsu's HDD business into its fold, Toshiba's goal to become a leading storage provider will further boost its plan to expand its range, including the recent half-terabyte (512GB) 2.5-inch SSD hard drive, announced in December 2008.

With the transfer of Fujitsu's HDD business into its fold, Toshiba's goal to become a leading storage provider in the 2.5-inch space will be further boosted after it announced a half-terabyte (512GB) 2.5-inch SSD hard drive in December 2008.

According to the MOU, Fujitsu will transfer its HDD design, development, manufacturing, sales and all other functions to Toshiba, except Fujitsu’s HDD head and media businesses. The transfer also includes HDD manufacturing subsidiaries in the Philippines (FCPP) and Thailand (FTC), and HDD sales and marketing offices outside Japan.

With the consolidation of both companies’ HDD businesses, the move will help Toshiba reinforce its strong position as a key provider of small form factor HDDs (2.5-inch and smaller), which are widely used in notebooks, mobile products and consumer electronics. The agreement will also give Toshiba greater leverage into the enterprise HDD market for server and data storage system applications, where Fujitsu is currently the leader. Of primary note is the expansion of Toshiba’s foray into the solid state drive (SSD) business, where Toshiba can now fuse its NAND flash memory technology with Fujitsu’s enterprise HDD technology. Toshiba announced a first 512GB SSD in December 2008 on top of its push into fuel cells. While Toshiba has a 1.8-inch and 2.5-inch HDD line, adding Fujitsu’s customer base, particularly in the enterprise field, would bring greater benefits to the company. (Editor opinions: 3) 
David Chieng, Editor, HWM Singapore

David Chieng, Editor, HWM Singapore

David (HWM SG): Hard disk drives are notoriously low margin businesses from the retailer point of view; and even more so when it comes to the manufacturer, especially since we’re seeing the total cost of storage dropping like a rock year on year. This is great for the end user, but not so good for the manufacturer, making competition extremely intense. After all, Seagate bought up Maxtor not too long ago, leaving the desktop hard disk drive market dominated by Seagate and Western Digital. (more…)

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