Is SanDisk becoming an acquisition target as the market consolidates?
‘We don't comment on rumour or speculation’. But we do
Rumors and speculations are mounting that SanDisk might be an acquisition target, with reports indicating it's been chatted up by two suitors wanting to buy it, with Western Digital (WD) in the frame.
There is strong logic for such a deal, as SanDisk is a hugely hot flash product supplier, and partners Toshiba in the flash foundry business.
It has flash chips with 3D ones coming, ULLtraDIMMs (flash DIMMs), Fusion-io hardware and software IP, PCIe flash cards, caching software, SSDs, and the InfiniFlash array – the flash equivalent of a JBOD – which is OEM'd by Tegile.
The disk drive business, after many years, has consolidated to just three vertically integrated suppliers. Two of them are expanding up the stack into selling disk drive arrays, meaning WD's HGST unit and Seagate.
It's taken 20 years or more for this consolidation to happen.
The flash foundry suppliers are four in number: Samsung, Intel/Micron, SanDisk/Toshiba, and SK Hynix. They sell chips to SSD, PCIe, and flash array suppliers.
Micron is moving up the stack into the flash systems business and SanDisk has its InfiniFlash flash array business. No existing mainstream storage array supplier has expanded downwards into the flash component supply business.
Seagate with its Xyratex ClusterStor and Dot Hill storage array enclosure business has a strategic relationship with Micron, but no financial integration of the two firms has taken place.
Against that background, the logic of a WD acquisition of SanDisk looks compelling, especially when we note that HGST holds all the flash component assets inside the WD business, and has an Active Archive array product.
Merging SanDisk and the HGST flash business would result in a hugely strong collection of vertically-integrated flash assets, from chip production to flash array hardware and software.
Of course, just because the logic of such a union seems compelling is not enough to cause an acquisition to happen. It could certainly get financial analysts licking their lips at the possibilities, though.
SanDisk spokesperson Siobhan Lyons said, in the time-honoured phrase: "We don't comment on rumour or speculation." So there. ®