Samsung Mulls Selling Hard Disk Drive Business

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News Posted: Mon, Apr 18 2011 12:31 PM
The suits over at Samsung have an important decision to make. Should the company hang onto its hard disk drive (HDD) business even though it's losing money and hope for greener pastures on the horizon, or cut its losses by selling off the unit and using the cash to invest in other areas? Citing "a person familiar with the matter," this is what Samsung's decision makers are currently discussing, The Wall Street Journal reports.

If Samsung decides to sell, it hopes to raise about $1.5 billion, though the un-named source says the company would consider low-ball offers under $1 billion. Samsung would then most likely shuttle those funds over to its memory chips and liquid crystal display (LCD) divisions.


As of the fourth quarter, Samsung held about an 11 percent share of the HDD market and has been losing money in it. One reason for this is that the emerging tablet market, and Apple's iPad in particular, has been cutting into the growth of notebook sales, which are major consumers of HDDs. Tablets, on the other hand, typically use flash memory based storage.

It's unclear if there are any potential suitors to Samsung's hard drive division. In March of this year, Western Digital scooped up Hitachi's HDD business for around $4.3 billion in cash and stock, and now owns about half the HDD market. Seagate, meanwhile, claims about a 29 percent share.
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I wouldn't be surprised to see WD scoop up Samsung as well. That will basically leave them with just Toshiba and Seagate as competitors though with the price of SSD's dropping quickly memory makers are going to be taking away from the market.

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Sammy is making so much money everywhere else it only makes sense to cut your losses and focus on those money making products. Not to mention the hard drive market isn't growing as rapidly as the phone/tv/tablet markets right now.

I don't know if wd will try to get this sale because of their recent purchase, I guess it depends if they have a billion burning a hole in their pockets or if they even care about another 11% of the market share.

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rrplay replied on Mon, Apr 18 2011 5:47 PM

For a while the Samsung 1 TB drives were a really great all- around bang for buck performer.and it s is more likely thank not that the suits will sell the HD division off for the cash capitol to invest in other more profitable markets. they have to be accountable to the their shareholders as well as being competitive in the rapidly developing tablet and monitor markets. Samsung 3D ?

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Inspector replied on Mon, Apr 18 2011 7:27 PM

I say sell and make more advanced monitors for us :P. I never tried a Samsung HDD but they do seem nice.

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rapid1 replied on Mon, Apr 18 2011 10:35 PM

As the largest memory producer they should sell it and start making super ssd's they have the resources and more memory R&D than even Intel probably.

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dadodgeson replied on Mon, Apr 18 2011 10:35 PM

they are as good as every other one but samsung does make some nice products

just got a 40" 3d tv its freakingn killer use it as a moniter/tv the pip is alright

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jonation replied on Mon, Apr 18 2011 11:02 PM

exactly

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Atticus14 replied on Tue, Apr 19 2011 2:01 AM

its a shame the F3 and F4 HDs they make are very nice. But maybe since they make a ton of memory chips and are "in the know" about all things SSD, maybe they know or foresee SSDs becoming substantially cheaper and are ready to get out of the mechanical drives.

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Super good and cheap SSD's FTW :)

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rrplay replied on Tue, Apr 19 2011 12:04 PM

I guess it's official ;

http://www.tweaktown.com/news/19427/seagate_and_samsung_join_forces_plan_to_take_over_the_hdd_world/

Quote:

""It has been confirmed - Samsung are set to combine their Hard Disk Drive Operations with Seagate. Samsung set to receive significant equity ownership in Seagate while extending and enhancing the existing cross-license agreement between both companies. Included is a NAND flash memory supply agreement in which Samsung will provide Seagate with market-leading semiconductor products for use in Seagate's enterprise solid state drives, solid state hybrid drives and other products.

A disk drive supply agreement under which Seagate will supply disk drives to Samsung for PCs, notebooks and consumer electronics. Expanded cooperation between both companies to co-develop enterprise storage solutions. Finally, a shareholder agreement in which an executive from Samsung will be nominated to join Seagate's Board of Directors.

The combined value of the above transactions, agreements and love is worth approximately $1.375 billion USD which will be paid by Seagate to Samsung in teh form of 50-percent stock and 50-percent cash."

I guess i was not to far off in previous comment regarding a responsibility to shareholders ..& looks like a done deal to me.

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Clixxer replied on Sat, Apr 6 2013 2:16 PM

Atticus14:

its a shame the F3 and F4 HDs they make are very nice. But maybe since they make a ton of memory chips and are "in the know" about all things SSD, maybe they know or foresee SSDs becoming substantially cheaper and are ready to get out of the mechanical drives.

I haven't used alot of the Sammy spindle drive but I own a 840 Pro and this SSD is awesome. Id hope that if they sell it off they keep their SSD business. I can understand getting out of the spindle drive business because WD, Toshiba, and Seagate pretty much have those on lock down but for SSDs they make the best if not atleast a top 3 in performance and quality. That would be a  loss to the SSD market for them to sell off that side of the business. 

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good to learn this blog about hartwares. keep it up. keep going on. thanks

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