Seagate lands Samsung's hard drive unit for $1.37 billion

ZDNet ^ | April 19, 2011 | Larry Dignan

[TheBattman]

Seagate has acquired Samsung Electronics’ hard disk drive (HDD) operations for $1.37 billion in a move that boils the market down to two players. Seagate and Western Digital now control 90 percent of the HDD market with Toshiba a distant third.

Under the terms of the deal, Samsung will lump its HDD unit into Seagate in exchange for a cash and stock deal worth $1.375 billion. Samsung will own nearly 10 percent of Seagate and the two companies will cross-license patents. Samsung will also provide NAND flash memory for Seagate’s solid-state drives. In addition, Seagate will supply drives for Samsung’s PCs.

The two companies will also co-develop enterprise storage gear. Seagate and Samsung have had a joint development pact since August.

In many respects, the Seagate-Samsung deal rhymes with Western Digital’s acquisition of Hitachi’s storage unit. You have two U.S. companies teaming up with an Asian partner to gain more scale, boost margins and focus more on the enterprise. Related: Samsung’s hard-drive unit sale could lead to massive market consolidation

[TheBattman]

I just don't see this as being good in the long-haul for consumers or corporate users. My observation over the last few years is that with the consolidation of HD production, the overall reliability and quality has fallen off. I believe this problem is exacerbated by the few remaining manufacturers building more of their components in China and worse... where QC isn't the biggest priority.

But as this is outside the perusal of US jurisdiction, I don't see there being any regulatory roadblocks.

[skeeter]

I used to buy HDD, I remember the margins being pretty slim for the investment required to manufacture them.

However, I do agree that two players only is not a good thing.

[C210N]

I miss the creme of the market - Micropolis drives.

[Darksheare]

I miss Maxtor.
I have several Maxtor drives, and they haven’t given me problems.

But that’s because their quality was high.
The newer stuff seems to be manufactured as cheaply as possible.

Unless you want to fork out for Solid State Drives.

[TheBattman]

I also remember a couple of decades back when Seagate made some good drives...

Then Western Digital drives had a high point..

Now... who knows? I have used Samsung drives with good success, as well as Hitachi (that “distant third” manufacturer mentioned in the write-up).

But my experiences of the last 4 years has been that Seagate drives (both bare and external) are flakey and unreliable in general, and that Western Digital drives are either great or duds - and you never know, even within the same shipment which is which.

I suppose this will all change dramatically if the SSD drives ever get competitive price-wise. Unfortunately, the quality of those will come down with the price (as the outsourcing continually seeks cheaper venues to manufacture).

[Yo-Yo]

Brilliant move for Samsung to unload their HDD production to Seagate.

Spinning media's reports of death have been greatly exaggerated in the past, but it won't be long before SSDs take over most HDD functions in home PC/laptop market, where the volume is.

Seagate and WD will end up being server drive makers.

[ocr1]

Agreed, and sad to see. Samsung was making progress with quality controllers in their SSDs. I wonder if that will continue?

[TheBattman]

I miss Maxtor. I have several Maxtor drives, and they haven’t given me problems.

But that’s because their quality was high. The newer stuff seems to be manufactured as cheaply as possible.

Yep - I use to be a fan of Maxtor- but then they were bought up by by Seagate and quality dropped almost immediately. I had two drives bought only months apart - same basic drive model, both labeled as Maxtor - the first, manufactured before Seagate was still going strong when I sold the machine. The second drive - one of the first after the acquisition by Seagate, was a dude, and the warranty replacement was just as bad.

[tacticalogic]

Do you remember when MiniScribe was shipping bricks?

[TheBattman]

As I posted - the biggest obstacle to SSD is the price. The high cost prevents making a huge inroad to consumer PCs. When consumers want a sub $500 laptop - but a reasonable sized drive (SSD) accounts for over half of that total... it doesn’t leave room for any kind of reasonable other components and stay under that price point.

And if Seagate and WD end up as “server drive makers”, they had better up the quality across the board - which would mean a massive turnaround.

[max americana]

I have both Seagate and Maxtor HDD’s and my brother has one Western Digital 1 TB HDD.

2 of my Maxtor’s were the original 250 GB’s “big” HDD’s but because they were heavy, portable yet heavy, I only stuck my anime fansubs into it. My Seagate is the Black Drive, with the encryption pw protected version which cannot (supposedly) be cracked without the PW. That’s what I bring to kanadastan and back just in case TSA confiscates it.

My bro’s WD has never failed him either..and it’s the book-size 1 TB he bought in 2008.

[TheBattman]

What a scam that was - I really never did grasp how anyone thought they could get away with it (though those drives were as heavy as bricks!). They couldn’t possibly ship, then issue a recall quick enough to get them ALL back.

But then, throwing employees that were involved in the scam under the bus... who would have thunk that they would go running to the press??? duh...

[Milhous]

With the exception of one bad family, I’ve generally had good luck with Seagate.

Besides, doesn’t one Chinese factory make all hard drives and slap on a couple of different brand name labels?

[Buckeye McFrog]

With the research currently underway on flash memory they may become the world’s largest buggy whip manufacturer.

This company seems pretty stupid anyway. When they had a facility in Pittsburgh they were paying everybody 30-40% above market.

[tacticalogic]

As I understand it, they weren’t just shipping the bricks, when the customers returned them they put them back on the shelf, inventoried them as hard drives (returned, unused) and counted as assets on the books.

[Darksheare]

I haven’t bought a hard drive in awhile, I don’t expect to be impressed by any companies these days.

[Erik Latranyi]

As I posted - the biggest obstacle to SSD is the price.

SSD pricing is dropping rapidly. Most slates built today use SSDs and most new laptops have SSDs available at fairly reasonable prices.

Sizes are still small when compared to conventional HDDs, but the gap is closing fast.

Also, consider that local storage is going to suffer tremendously with the onslaught of cloud storage. Forget the issues with storing everything "in the cloud", it is real, it is here and it will reduce the need for large storage space locally.

[TheOldLady]

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[Dick Bachert]

I’ve had three Samsung HDs fail within 2 months of purchase. They DID replace both of them fairly promptly. After the second failure, I went out and purchased a Seagate. It has been running with no problems for nearly 6 years. The last replacement Samsung is still in the box as I was afraid to install the damn thing.

MEMO TO SEAGATE MANAGEMENT: Not sure what you THINK you’ve bought here but start by BURNING DOWN THE SAMSUNG PRODUCTION FACILITY!

[Dr. Sivana]

I miss the creme of the market - Micropolis drives.

Great drives. The magnets in the 330 MB/ 5 1/4" SCSI models would pick up a tricycle. The electric motor could rotate a whole house fan.

But there were other premium brands: Priam, for instance. And don't forget the Rolls-Royce of hard drives, CORE!

R.I.P. Rodime, Quantum, Computer Memories Inc. (worst drives EVER), Fujitsu (now owned by Toshiba), Tandon (solid drives for the $) and Tulin.