Samsung Electronics may be selling its hard-disk-drive business in a bid to claw back cash and invest in new areas.
The company wants to dump this arm of its business as it’s losing money. It wants to sell the unit for $1.5 billion. However, if it can’t shift it, it may also accept a deal under $1 billion as it becomes desperate to get rid of it says the WSJ.
One buyer cited for the business is Seagate, although it’s currently keeping schtum with the age old excuse of not commenting on rumour or speculation.
Samsung has a 14.6 percent share of the hard drive market, which makes it the third largest player. However, poor first quarter sales from low TV and flat screen sales, plus the fact that it’s up against major power Western Digital, which bought Hitachi’s hard drive business last month for $4.3 billion, means it’s struggling.
The fact that Western Digital is so dominant in this market, should also spur Seagate on to make the purchase of Samsung’s HDD business.
When the sale of Hitachi went through, IHS Suppli predicted that the new partnership would see Western Digital taking a 49.6 percent share of global Hard Disk Drive unit shipments based on Q4 totals – compared to 29.4 percent for Seagate, a clear sign the company needs to do something to catch up.
The HDD industry hasn’t been faring too well lately.Apple’s iPad has had something to do with this – when there’s trouble Apple always seems to crop up. This is because the iPad uses flash-memory chips rather than magnetic disks.