Feeds

Fujitsu sells out to Toshiba

No job loss shock

Security for virtualized datacentres

Fujitsu has agreed to sell its hard disk drive (HDD) business to Toshiba, according to reports.

Ranked number six worldwide by iSuppli, Fujitsu's HDD business is loss-making, and Western Digital (number 2) was a rumoured buyer before Toshiba emerged. The global HDD industry is seeing a contraction in demand due to the deepening recession. Both Seagate (number one) and Western Digital have announced staff cuts and other cost-saving measures.

Exactly what Toshiba (number five) is buying is unclear, but read/write head manufacturing is not included. Fujitsu has announced that its HDD head manufacturing operation at Nagano, Japan will terminate. The plant will revert to only making printed circuit boards for servers and telecoms kit, which it currently does alongside the read/write heads, after March 31.

None of its 360 employees will lose their jobs with reassignments to other parts of Fujitsu likely. The company will book a ¥5bn ($56m) loss to cover this transition and attribute it to the final 2008 quarter.

There has also been speculation that Fujitsu's Yamagata drive media plant may not be included in a Toshiba purchase.

Fujitsu has hard drive manufacturing operations in the Philippines and Thailand. There is speculation that the Fujitsu HDD manufacturing operation in Thailand could close with around 7,000 jobs threatened. The apparent logic here is that with the current depressed state of demand for 2.5-inch drives Toshiba has no need of the plant's capacity. It seems far-fetched.

The key to profitability in the HDD business is spreading manufacturing and other costs amongst as many hard drives as possibly. If you are currently making a loss, as Toshiba HHD operations are, then you need more manufacturing capacity, not less.

No selling price has been revealed, although one in the area of 30 to 40 billion yen ($340m - $450m) has been suggested. If and when the sale does go through that will open a route for profitability for Toshiba's HDD operation but leave Samsung, currently the fourth-largest HDD manufacturer, still in the loss-making mire. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
It's Big, it's Blue... it's simply FABLESS! IBM's chip-free future
Or why the reversal of globalisation ain't gonna 'appen
IBM storage revenues sink: 'We are disappointed,' says CEO
Time to put the storage biz up for sale?
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Microsoft and Dell’s cloud in a box: Instant Azure for the data centre
A less painful way to run Microsoft’s private cloud
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.