Feeds

Seagate sucks hard disk biz from Samsung

Loved-up pair's pillow talk turns to enterprise storage

Bridging the IT gap between rising business demands and ageing tools

It's done: Seagate has completed the transaction to acquire Samsung's hard disk drive business. Now it has to do the grunt work of integrating the two product lines.

Seagate has gained Samsung’s Spinpoint MP4 and M8 line of 2.5in HDDs and a boffinry centre in South Korea. Samsung employees joining Seagate include a number of senior managers and design engineers from the S. Korea facility, who will focus on the development of small form-factor products for the mobile compute market.

This transaction was announced in April 2011 along with a series of other agreements between Seagate and Samsung. Seagate is supplying disk drives to Samsung for PCs, notebooks and consumer electronics devices. Samsung is supplying flash chips for use in Seagate’s enterprise solid state drives (SSDs), solid-state hybrid drives and other products. The companies have also extended and enhanced an existing patent cross-licence agreement and increased cooperation to co-develop enterprise storage products.

All this is said to substantially expands Seagate’s customer access in China, Southeast Asia, Brazil, Germany and the Russian Federation.

Seagate kingpin Steve Luczo - president, chairman and CEO - said Seagate and Samsung have aligned their product development efforts and roadmaps to get new kit to market faster.

Overlapping products

Seagate will retain certain Samsung HDD products under the Samsung brand name for 12 months, and maintain or establish a number of independent operations including sales staff, key production lines and R&D. Customers can find more information at www.seagate.com/samsung.

Samsung has three 2.5-inch products:

  • Spinpoint MP4 7,200rpm, up to 640GB, 2-platter notebook drive
  • Spinpoint M8 5,400rpm, to 1TB, 2-platter notebook drive
  • S3 Portable 3.0 5,400rpm, up to 640GB external drive, thought to contain an MP4 disk.

Seagate's 2.5-inch product line is much more extensive:

  • Savvio 10,000rpm, up to 900GB, 3-platter, enterprise tier-1 drive
  • Constellation 7,200rpm, up to 1TB, 4-platter, enterprise tier-2 drive
  • Momentus 7,200rpm, up to 750GB, 2-platter notebook drive
  • Momentus 5,400rpm, up to 750GB, 2-platter notebook drive
  • Momentus Thin 5,400rpm, 320GB, 1-platter notebook/ultrabook drive
  • Momentus XT 7,200rpm, 750GB + 8GB flash, 2-platter hybrid notebook drive
  • FreeAgent GoFlex 5,400rpm, up to 1.5TB external drives.

El Reg assumes that Samsung's S3 Portable line will be subsumed into the FreeAgent GoFlex line and disappear. The MP4 overlaps with the Momentus 7.2K and will disappear, possibly quite soon. The M8 has more advanced technology than the Momentus 5.4K and that technology will, we think, be used in a future Momentus 5.4K line although the SpinPoint M8 brand will likely go away after 12 months.

The money side

Calendar year 2010 revenue for Samsung’s HDD business was approximately $3.1bn with some 66 million drives shipped, but Seagate may not retain the whole amount of this revenue due to customers rebalancing HDD purchases from suppliers.

The combined value of these transactions and agreements is approximately $1.4bn, consisting of 45,239,490 Seagate Ordinary Shares and the remaining balance settled in cash. Samsung will designate a nominee to join Seagate’s board of directors. Seagate doesn't expect significant restructuring costs and expects to achieve significant reductions in overall operating expenses for the combined business.

Meanwhile Western Digital expects to close its Hitachi GST purchase transaction in March. This delay is a concern, according to a Wall Street Journal report, to Hiroaki Nakanishi, Hitachi's president, as there could be further hold-ups because approval for the deal from all the international regulators involved, such as the Chinese, has yet to be obtained.

There is no mention of the deal unravelling though. ®

Build a business case: developing custom apps

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.