Seagate Completes Purchase of Samsung’s Hard Drive Business
Most of us were pretty quick to blame the recent round of hard drive warranty cuts on the flooding in Thailand, but we can probably blame reduced competition for future negative trends in the hard drive industry. Seagate has officially completed the purchase of Samsung’s hard drive business that they began back in April. The Samsung name will not disappear immediately and we can expect to see Samsung exert some influence with their newfound stake in Seagate to push for more hybrid hard drives and increased R&D into SSDs. Unfortunately, we can also expect Western Digital to complete their purchase of Hitachi’s hard drive business soon, and then we’ll be left with just two major desktop hard drive manufacturers. At least when Seagate bought Maxtor in 2006, there was still hope that Hitachi could rehabilitate the Deskstar brand and that Samsung’s growing market presence would prevent a duopoly in the hard drive industry.
Seagate will get a cadre of Samsung managers and employees, and Samsung solid-stage storage for its hybrid drives, too. Meanwhile, Samsung gets a 9.6 percent ownership stake in Seagate, a good bit of cash, and supplies of Seagate hard drives for its computers.