Samsung Looking to Sell HDD Division for $1.5B
The Korean IT giant wants to trade in its hard disk drive business to invest in NAND flash chips and tablet PCs.
Korea's Samsung Electronics is mulling the idea of unloading its hard disk-drive business so that it can concentrate on research and development in tablet PCs, solid-state processors and other higher-growth areas, according to an April 18 report in the Wall Street Journal.
The Journal said that Samsung is looking to sell its HDD division for $1.5 billion. As one might expect, the most likely takers are the world's two largest HDD makers, Western Digital and Seagate Technology.
A spokesperson from Seagate-which until 2010 was the world's No. 1 HDD maker and seller-declined to comment on a query from eWEEK. A Seagate-Samsung merger would give Seagate about 40 percent of the world's HDD market.
A WD spokeswoman said the company does not comment on rumors, but WD probably isn't a serious candidate anyway. On March 7, Western Digital took a gamble on acquiring Hitachi Ltd.'s HDD business for $4.3 billion in cash and stock, a transaction that gave WD about 48 percent market share.
Samsung, which owns about 11 percent of the world HDD market, turned in weak earnings guidance to Wall Street during its most recent quarterly report. It has been losing money on HDDs for several quarters.
It's no secret that the HDD industry has been under pressure due to the huge success of Apple's iPad, Samsung's Galaxy and other tablet computers-in addition to smartphones and portable music players-which use solid-state NAND flash-memory processors.