Western digital acquires Hitachi Global Storage Tech for $4.3B

http://www.engadget.com/2011/03/07/western-digital-drops-4-3-billion-to-acquire-hitachi-gst-enter/

by yread • 15 years ago

84 18 15 years ago

Bad headline: WD acquired Hitachi Global Storage Technologies.

The Hitachi company itself is a monster that makes WD look like a mom & pop operation. What you see as a consumer is dwarfed by its industrial products and much, much more.

scrrr• 15 years ago

Indeed. I've deleted my posts below as they make no sense with what you correctly pointed out.

yread2• 15 years ago

Corrected

Splines• 15 years ago

There's something about these large Japanese conglomerates that just don't seem to have any parallel in the US. GE might be the closest thing, but even though it's a larger company it doesn't seem to have the finger-in-every-pie feel that these Asian conglomerates do (e.g., Hyundai, Fuji, Mitsubishi, ...)

asnyder• 15 years ago

The US definitely has parallels. You can take almost any brand, and trace it back to a handful of large corporations. The Japanese are just more open about it, whereas US companies have subsidiaries that falsely suggest competition.

yread2• 15 years ago

Hitachi hard disks had highest failure rates.

http://www.hardware.fr/articles/810-6/taux-pannes-composants...

wazoox• 15 years ago

In the past few years, they had the lowest failure rate, by a large margin, on professional grade drives. I say that having set up and sold many thousands hard drives since 2003.

joeybaker• 15 years ago

The business calculus is a bit strange here. WD and Hitachi are in the part of the storage market that has to be pretty close to it's peak. The HDD business seems to have grown in 2010 http://www.eetimes.com/electronics-news/4213390/Western-Digi... but it's pretty doubtful that the trend will continue, and it seems like there's a pretty sharp cliff coming.

That in mind, why pay $4.3B for a company that only has 2-5 years left in a dying, $0.6B industry that has low profit margins?

ojbyrne• 15 years ago

It's a little difficult to interpret, but that's 0.6 billion units shipped, not $0.6 billion.

jonknee• 15 years ago

You're severely underplaying the HD storage market's revenue. Western Digital alone had nearly $10 billion in revenue last year.

Also, Hitachi GST is a partner of Intel's for SSDs... Seems like a good acquisition for WD.

siromega• 15 years ago

The price might be high, but I figure this (consolidation of market participants) is normal in a market that is peaking or on the decline.

sitkack• 15 years ago

Now that top tier drive maker has acquired the 2nd or 3rd tier maker expect storage prices to go up. Seagate isn't the competition it used to be.

rosser• 15 years ago

This isn't just about hard drives. Hitachi Storage also makes some pretty huge -- and well-regarded -- SANs, and enterprise storage is one area into which I've never really seen WD make much headway. This acquisition would make them a full-spectrum player in the storage market.

Enterprise storage is also an area with rather higher profit margins than merely hawking spinning rust.

wmf• 15 years ago

But HGST != HDS.

bane• 15 years ago

The acquisition may make sense in light of a saturated market. They effectively kill off a competitor and can move in on their customers.

kirpekar• 15 years ago

From WD's press release:

Calendar 2010 was a year of tremendous opportunity for the hard drive industry with 651 million drives shipped. That's 330 million terabytes of storage capacity sold into a broadening set of applications and markets. At 16%, this was the industry's strongest full year unit growth in five years. Rotating magnetic storage remains the dominant technology solution for high-volume mass storage of digital content in both the consumer and commercial markets. Full year revenue for the industry expanded by some 13% to $34 billion.

amitraman1• 15 years ago

WD stock is up today. IT seems like a great deal, WD can now sell more aggressively to businesses.

jamesbressi• 15 years ago

Maybe you forgot this? Hitachi School House Rock video...

http://www.youtube.com/watch?v=xb_PyKuI7II

"Get Perpendicular" Hitachi Global Storage Technologies.

Western digital acquires Hitachi Global Storage Tech for $4.3B

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