Wednesday, March 9, 2011

Western Digital to Buy Hitachi Hard Drive Division




In a sign that flash memory is becoming a bigger part of our lives, comes news that Western Digital, the number one hard disk maker, is buying the number 3 hard disk maker. Hitachi has been number 3 behind Seagate for a while now.

A couple of years ago, WD tried to merge with number 2 in disk manufacture, Seagate, but there were concerns of government intervention due to potential regulatory issues. So instead, WD has now purchased the Hitachi division responsible for hard drives.

The deal is rumored to be worth 4.3 billion dollars.

Speculation is that the 2 companies decided on this after determining that creating economies of scale will help cut costs. With hard drive storage becoming huge, the demand for them may begin to drop. Add to that the increase in SSD (solid state drives) that are appearing in tablet devices and an economy of scale makes good sense.

The age of the hard drive is not over... not by any means, but this consolidation does mean things are changing.

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