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Samsung Sold its Hard Drive Business to Seagate for $1.4 Billion
- ars 15y agoAnd then there were 4[1]. And soon to be 3[2]. And one of those doesn't make many drives[3]. So we have a duopoly in hard disks. I'm quite surprised regulators allowed this deal. [1] Seagate, WD, Hitachi, Toshiba [2] WD is buying Hitachi [3] Toshiba doesn't make many drives, and only makes 2.5 inch and smaller.
- nextparadigms 15y agoAre they all from the same country? Either way, the PC industry and the related component industry is fading away, so Samsung did the right move here. They probably want to focus more on the mobile markets.
- __alexs 15y ago(According to Wikipedia...) Seagate and WD are both have their HQs in California but Seagate is incorporated in Ireland. They also have a wafer fab in Northern Ireland.
- pyre 15y agoRight. We're entering the post PC era. Pretty soon everything will be done on tablets or 'in the cloud.' Neither of which require hard drives.
- derobert 15y agoWhere exactly do you think data 'in the cloud' is actually stored? Given, this may well require fewer hard drives (due to better capacity utilization), but still requires hard drives.
- danieldk 15y agoFortunately, there is more competition in the SSD space. And given that SSD will probably become the norm in laptops and desktops, this shouldn't be a problem for most people.
- adestefan 15y agoThe SSD market is starting to collapse in on itself as well. Most of the smaller controller manufacturers are starting to be bought by rivals and I'll be amazed if Sandforce makes it until 2013 without being bought. Plus flash chips are already a pretty small market.
- mrb 15y agoSandforce was already acquired (by LSI in October 2011).
- deleted 15y ago[deleted]
- wmf 15y agoSo it's now Seagate, Western Digital, and Toshiba. Signs that innovation has moved elsewhere, perhaps.
- protomyth 15y agoAs of late, Seagate drives have been pretty crappy, which is a real shame given their former glory. Maybe this purchase will change something.
- ludwigvan 15y agoAgreed. Two of my latest Seagate purchases died while I was very satisfied with Samsung. It might be worse though, buying a Samsung drive, should one expect Seagate or Samsung quality in the future?
- beedogs 15y agoThis is precisely what makes Seagate drives a dubious purchase for me. I usually go with other brands. Now, there's one less.
- wazoox 15y agoStorage professional here. Disk drives failure rate is usually 0.5 to 3% a year. Drives do fail, so you can't draw any statistical significant figures from the failure of a couple of drives among a total of four or five (or even ten or twenty). However my company's selling drives by the thousands, and here's what I can say: Seagate barraccuda are the worst pieces of crap being sold since the infamous IBM 80GB debacle; their failure rate is 10% a year, no less. Unsurprisingly Seagate just dropped their warranty to ... 1 year! Keep away from these at all costs... Seagate Constellation seem to be OK but I only have a few of these. Hitachi 1, 2 and 3 TB look impressive: 1 failure among 2 thousand drives, in 2 years. WD seem OK, but I haven't nearly enough of them to get significant numbers (a couple hundreds).
- ugh 15y agoCool! Do you have any numbers for SSDs?
- wazoox 15y agoUnfortunately I didn't set up as many of these, but the first generation of SLC SSD were quite prone to failure; The latest SSD with Sanforce 12xx controllers seem to work very well. I had no failure on these yet, though I had some trouble with older designs.
- vondur 15y agoI'm surprised that they sold the SSD business. I'm guessing that's primarily what Segate was after.
- ghc 15y agoThey did not sell their SSD business. They sold their Hard Drive business.
- fletchowns 15y ago"The agreement gives Seagate select elements of Samsung’s hard drive business, including Samsung’s high-capacity M8 hard drives and semiconductors used to make solid-state drives"
- ghc 15y agoSamsung will continue to make SSDs and other products based on its NAND business, but Seagate will gain NAND supplied by Samsung that it needs to launch its own SSD business along with acquiring the entire Samsung HDD business. This was probably the only way for Seagate to complete the deal. Samsung's NAND business is probably more valuable than the entirety of Seagate. Here's the rundown: http://www.seagate.com/ww/v/index.jsp?locale=en-US&name=samsung-seagate-alignment-announce-pr&vgnextoid=d00a78162ab6f210VgnVCM1000001a48090aRCRD http://www.seagate.com/ww/v/index.jsp?locale=en-US&name=...
- prodikl 15y agoWith samsung the world leader in ram I would have thought they could've done some great things in ssd field. Bummer.
- wmf 15y agoAs the largest flash vendor, Samsung may win no matter which controllers are used. Seagate has no consumer SSDs so I can understand why they want to buy that business from Samsung.
- prodikl 15y agoAh, the good 'ol iPhone bundling tactic. I'm definitely not an opponent of sticking to what you're good at, and doing it best. And with this deal, I guess that's what's happening with both companies!
- j45 15y agoGlad the sale wasn't the other way. I remember when Seagate first bought Maxtor.
- andrewfelix 15y agoIn the short term this is good for Seagate. In the long term though, I think this is good for Samsung. More and more of our memory needs are being met by online storage. Sure we'll need NAND going into the future. But are we going to need it in the quantities that we currently demand when cloud storage is becoming more and more popular?
- bentlegen 15y agoOnline storage providers still need to purchase hard disks.
- andrewfelix 15y agoOnline storage providers don't use NAND, and they won't be consuming drives at the same rate as consumers.
- wazoox 15y agoWD and Seagate now make 87% of all disk drives. Unsurprisingly, they just slashed warranty on various drives down from 5 to 3 years, and even down to only 1 or 2 years for some models. Oligopoly will suck for us consumers.
- kirpekar 15y agoTrue, only if the WD HGST merger goes through.
- jitbit 15y ago$1.4 billion, mates. $1.4 billion for a business with manufacturing plants, complicated global logistics... Now let me remind you that Facebook is valued 85 (!) times more.. o_O
- blub 15y agoStock market valuations are almost useless... unless you work with stocks. If Facebook disappeared tomorrow, nothing of value would be lost and another web site would take its place.
- antirez 15y agoNot really, what disappears is the Facebook "potential" to make money, and the valuation is done thinking at this possibility. Now if you look at it in this way, billions of people using Facebook can be monetized probably much better in the long run compared to selling a new HD from time to time to millions.
- vasco 15y agoWhat amazes me is that people actually think this is the right way to look at things...
- seqastian 15y ago1.4B .. money they will need to keep investors happy while burning money on smartphones
- apike 15y agoApple is the largest buyer of SSDs in the world, but their largest supplier has been Samsung, a company they've been increasingly at odds with in the phone business. In one day, it is announced that Samsung has sold this business, and that Apple has purchased a competing SSD supplier. Just like that, the shape of the market shifts dramatically.
- forgottenpaswrd 15y ago"In one day, it is announced that Samsung has sold this business, " Not really, they had sold the hard drive business, but not the SSD business. Read the article, you will notice it says that it provides Seagate a LINK with the SSD business, not with the business itself.
- chalst 15y ago"Most of the world’s disk drives are not able to be built because Thailand is underwater” Consolidation when supply is depressed is anticompetitive.
- wmf 15y agoThis deal was decided months ago, as was the WD/HGST acquisition.
- chalst 15y agoIt's not clear to me where you're going with that observation.
- wmf 15y agoShould they cancel an acquisition because of a temporary manufacturing problem? IMO the flooding shouldn't affect our thinking about whether these deal are competitive or anticompetitive.
- chalst 15y agoWhen there are few suppliers, depressed demand makes it easy for oligopolists to behave like monopolists. Should they cancel the deal? Certainly their shareholders wouldn't like them to do it out of the kindness of their hearts. I do think that competition watchdogs should be looking at HD mfers very closely now.
- wofser 15y ago1.4B or around 980M formatted.
- rkalla 15y agoFor anyone that is curious about Seagate's SSD play and have been waiting for them to do something customer-facing for a while now: they have actually been doing enterprise flash storage for years, but I would assume through this acquisition we will now see official customer-facing drives being sold next year. Likely rebranded Samsung 830s for starters (which is a solid drive) and hopefully get some updates and a common controller/firmware between the consumer drives and enterprise drives in 2014/15 to bring them in more a competitive lineup with the SanForce controllers that are dominating (note: still waiting to see what the 3rd gen Intel's perform like, they may change the landscape. Hard to say at this point). Not thrilled to see only two options when it comes to spindle drives, but I imagine those aren't long enough for this world to really create a hub-bub.
- kephra 15y agoThats bad, because the Samsung discs had a much better quality than Seagate or Western Digital. We now have a monopoly of two low quality discs.
- thebigshane 15y agoDuopoly. Incredibly interesting list of existing duopolies: http://en.wikipedia.org/wiki/Duopoly#Examples_in_business http://en.wikipedia.org/wiki/Duopoly#Examples_in_business