Samsung Looking to Sell HDD Division for $1.5B

By Chris Preimesberger  |  Posted 2011-04-18 Print this article Print

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.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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