updated 11:10 pm EDT, Sun April 17, 2011
Samsung considering selloff of hard drive business
A source claimed Sunday night that Samsung was looking to sell off its hard drive business. The Korean company had set a target price of $1.5 billion but was eager enough to sell it for under $1 billion if it couldn't fetch the intended target. Seagate was the only named candidate from the Wall Street Journal's tip, but it wasn't clear how likely the US company was to land the deal.
Samsung had warned earlier this month that it would see profits shrink rapidly in its winter quarter results. Its hard drive segment was one of those at fault for the poorer results and has regularly been a money-losing aspect of the company's business. The source noted that staying in conventional rotating drives was "not strategic to succeed" and could be moved off without much penalty.
The losses have been partly blamed on Apple. Widely considered the largest consumer of flash memory in the world, the firm has been largely responsible for the shift away from mini hard drives to flash in media players and has also been affecting computers. The entirely flash-based iPad may have been single-handedly responsible for pushing a complete reorganization at Acer after its share began collapsing rapidly while trying to promote conventional netbooks, which for awhile had been sustaining interest in hard drives. Apple has also had some success driving all-flash storage in its own computers through the MacBook Air.
Consolidation has been increasingly common in the storage business as the companies who have struggled have been more willing to sell their businesses. Western Digital bought Hitachi's team in March, but companies like Fujitsu have also been casualties as they faced tougher competition from Seagate and Western Digital, the two dominant players in the field.
Neither Samsung nor Seagate has commented on the rumor.