Toshiba Closes Deal to Take Over Fujitsu HDD Business

By Chris Preimesberger  |  Posted 2009-10-01

Toshiba and Fujitsu said Oct. 1 that they have signed final papers that clear the way for Toshiba to take over Fujitsu's multinational hard drive design and manufacturing businesses.

Financial details of the buyout, which has been in the works for months, were not disclosed. The two companies, which came to this agreement back in February, originally wanted to close the deal by July 1, but it took longer than expected to nail down the details.

"Effectively, the deal makes Toshiba the world's largest full-service data storage supplier, when taking into account hard disk drives, solid-state NAND flash disks, optical disk drives, software and everything else the company provides," Toshiba marketing executive Scott McCabe told eWEEK.

The combination of the two companies' 2.5-inch hard-drive market sales figures also makes Toshiba the largest such supplier for laptop and netbook computers, McCabe said-a statement backed up by several storage analysts.

The deal also gives Toshiba immediate entry into the enterprise HDD market, which it has coveted for years.

Fujitsu separated its hard drive design and manufacturing assets into four new companies, all to be owned and operated by Toshiba.

Fujitsu's hard drive business will be transferred to a newly created umbrella company, Toshiba Storage Device Corp., the company said. Fujitsu's manufacturing subsidiaries, Fujitsu Computer Products of the Philippines and Fujitsu Co., Ltd. of Thailand, will become Toshiba Storage Device (Philippines) and Toshiba Storage Device (Thailand).

Another HDD-related business, Yamagata Fujitsu, will become Toshiba Storage Device Yamagata. Upon completion of the transfer, these three companies will become wholly owned subsidiaries of Toshiba Storage Device Corp.

About 90 percent of the market for 2.5-inch laptop and netbook hard drives are supplied by Hitachi, Western Digital, Fujitsu, Hitachi, Seagate, Toshiba and Samsung. For the last couple of years, Fujitsu has been third in number of units shipped, behind Hitachi and Western Digital, according to industry analysts.

In 2008, Hitachi shipped 50.4 million 2.5-inch HDDs and Western Digital 50.3 million to lead the market, followed by Fujitsu's 38.6 million. Toshiba was fourth with 34.5 million, and Seagate reported 29.8 million units shipped.

The combination of Toshiba's and Fujitsu's 2008 2.5-inch HDDs-shipped figures is 73.1 million, easily eclipsing No. 1 Hitachi's market-leading numbers.

After the transfer, Toshiba will handle the sales and marketing of all HDD products, including Fujitsu's, and entrust all aspects of design, R&D, quality assurance, production technology and technology support to TSDC.

Fujitsu's sales and marketing offices outside of Japan, with the exception of some offices in certain regions, will be transferred to Toshiba's overseas business operations.


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