Feeds

Fujitsu sells out to Toshiba

No job loss shock

Top 5 reasons to deploy VMware with Tegile

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. ®

Beginner's guide to SSL certificates

More from The Register

next story
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
The DRUGSTORES DON'T WORK, CVS makes IT WORSE ... for Apple Pay
Goog Wallet apparently also spurned in NFC lockdown
Hey - who wants 4.8 TERABYTES almost AS FAST AS MEMORY?
China's Memblaze says they've got it in PCIe. Yow
Cray-cray Met Office spaffs £97m on VERY AVERAGE HPC box
Only 250th most powerful in the world? Bring back Michael Fish
IBM, backing away from hardware? NEVER!
Don't be so sure, so-surers
Microsoft brings the CLOUD that GOES ON FOREVER
Sky's the limit with unrestricted space in the cloud
'ANYTHING BUT STABLE' Netflix suffers BIG Europe-wide outage
Friday night LIVE? Nope. The only thing streaming are tears down my face
Google roolz! Nest buys Revolv, KILLS new sales of home hub
Take my temperature, I'm feeling a little bit dizzy
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
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.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.