Tag: Western Digital

Troubled Toshiba getting $1.8-3.6 billion bids for its chips

Toshiba Corp President and Chief Executive Officer Hisao Tanaka attends a news conference in TokyoTroubled Toshiba has received bids ranging $1.8-3.6 billion for a 19.9 percent stake in its flash memory business.

Tosh needs to raise around $3 billion from the sale to make it worthwhile. The outfit needs to offset a multi-billion-dollar write down on its US nuclear power business.

Buyers for the Japanese company’s chip unit include SK Hynix and Micron and data storage firm Western Digital and financial investors such as Bain Capital.

Tosh would prefer bids from investment funds because it could conclude a deal quicker than with industry peers that may have to seek permission from competition regulators before any acquisition.

A Toshiba executive has said the company will consider not just the offer price when selecting a bidder but other conditions as well.

A Toshiba spokeswoman said the company could not comment on specifics of the sale process.

The Nikkei Business Daily reported market concerns that Toshiba could delay its third-quarter earnings release, without citing sources. On reporting earnings, Toshiba also plans to reveal the write down on its US nuclear business.

EU allows Sandisk takeover

Sandisk extreme SSDsWestern Digital’s takeover  of Sandisk has been given the thumbs up by the European Union.

Despite fears that the Western Digital buyout might make it a little too powerful, the European Commission concluded that the takeover would not harm competition in the data storage market in Europe.

In October, Western Digital agreed to buy Sandisk in a $19 billion deal that will increase its ability to make flash memory storage chips used in smartphones and tablets.

The deal was announced in October. that Western Digital had announced plans buy chip maker Sandisk for around $19 billion. Flash specialist Sandisk is ranked by IDC as the largest manufacturer of NAND flash memory chips. The market for NAND flash chips was worth $28.9 billion in 2014, according to IDC.

The Commission found that the only overlap between the activities of the hard disk manufacturers is in selling flash memory storage systems and solid-state drives to the enterprise market. In this case, the effects of the merger on competition will be minimal, it has ruled, despite their relatively high combined market share. The presence of Intel, Toshiba, Micron and Samsung in the same market will exert sufficient competitive pressure to prevent the creation of a Western Digital hegemony, the European Commission has ruled.

The Commission also looked at the vertical link between Sandisk’s production of flash memory and the downstream markets for enterprise flash memory storage systems. With flash memory an essential component of solid state drives and other flash memory storage systems the EC investigators have researched whether Western Digital will be in a position to block competitors from access to flash memory.

It also studied the likelihood that competing producers of flash memory might find themselves with an unsustainable customer base. However, SanDisk’s presence on the upstream flash memory market was judged as ‘limited’ and the presence of several active competitors makes this a manageable risk.

Commissioner Margrethe Vestager, in charge of competition policy, said in a statement that she was pleased that the Commission had been able to ensure that this multi-billion dollar deal in a fast-developing industry can go ahead without delay.

 

Tsinghua targets two more chip firms

Picture courtesy of Wikimedia CommonsThe Chinese state backed company Tsinghua Unigroup wants to buy shares in two Taiwanese chip companies.

The two targets are Siliconware Precision Industry and ChipMOS – it wants to take 25 percent in each of these firms, with the first costing $1.7 billion and the ChipMOS share $347 million, according to Electronics Weekly.

Tsinghua already has a chunk of hard drive firm Western Digital and has attempted to buy US DRAM manufacturer Micron, as well as Taiwanese firms MediaTek and Powertech. The US and Taiwanese governments are believed to have put a spanner in the works for all these three.

According to Electronics Weekly, the Taiwanese government is unlukely to block the investments because they will be minority shares.

The Chinese government has pledged to grow its semiconductor industry over the next five years.

New drive tech packed with helium

up-balloonsWestern Digital has released a new enterprise drive that allows for 10TB densities by packing itself with helium.

Normally high-density drives use a mechanical trick on the available platters by overlapping data. The method in question is called Shingled Magnetic Recording (SMR). The read head is half the size of the write head, allowing for a smaller surface area to be covered, but since the write head is still full-sized, it can overlap the previous track. This increases storage density but is slower.

Standard drives use the Perpendicular Magnetic Recording (PMR) method. In addition, due to the overlapping data, any rewrites require subsequent tracks to be rewriten too, significantly slowing down write operations. The end result is that SMR drives end up used for archiving.

Western Digitals WD HGST UltrastarHe10 10TB PMR offers 10TB densities using the industry standard PMR method. The drives will be released under the HGST Ultrastar brand as the He10.

Stuffed with helium which places less strain on the motor, the five or six platter drive that can spin up to 7200 RPM on less power. The drive is more reliable and comes with a five year warranty. WD states the drive can achieve a power efficiency of 0.5 Watts per terabyte (reading the notes, this is at idle), which is 56 per cent less power than the previous generation.

The new drives support both SATA 6.0GB/s and SAS 12Gb/s. Other enterprise features are available with instant secure-erase and self-encryption over SATA with TCG.

No word on price yet but because the drives don’t use SMR, it means that home-built NAS systems can support them.

China to pour $47 billion into chip industry

Picture courtesy of Wikimedia CommonsTsinghua Unigroup, a conglomerate backed by the Chinese government, is to plunge $47 billion into the semiconductor business in the next five years.

That’s according to Reuters, which interviewed Tsinghua chairman Zhao Weiguo, who said China wants to become the third biggest semiconductor manufacturer in the world.

Intel, Samsung and Qualcomm hold the first three positions in semiconductor companies worldwide, but that could change because of the amount of money Tsinghua will throw into the chip pot.

Tsinghua has already said it has eyes on buying Mediatek and wanted to buy US memory manufacturer Micron. But moves like these are currently blocked by the Taiwanese and US governments respectively, which want to protect local manufacturers. Micron ruled out being bought  by Tsinghua.

But Tsinghua already has shares in US company Western Digital and Taiwan’s Powertech.

Entry level storage continues to fall

EMC storagePersonal and entry level storage shipments fell 13.4 percent in the third quarter, according to a survey by IDC.

And shipment values fell by 19.8 percent in the quarter, compared to the same quarter in 2014, amounting to $1.3 billion.

IDC differentiates between personal storage and entry level storage, and said personal storage accounts for over 98 ercent of the market.

Most shipments had 1TB and 2TB capacity, accounting for 75 percent of the personal storage market.

USB is still the most popular choice in the market while ethernet products showed a large decline in the last four quarters.

Top dog in the market is Western Digital with 31.2 percent of the market, followed by Seagate (25.9 percent) and Toshiba (18.2) percent.

Western Digital buys SanDisk for $19 billion

Sandisk extreme SSDsHard disk drive maker Western Digital has agreed to buy SanDisk in a $19 billion deal which will see it in a strong position to make Flash drives for the known world.

The deal is pretty complex, which makes it less attractive to shareholders who think it will make them a quick buck.

Western Digital said the value of the transaction hinges on the closing of an investment in the company by Unisplendour which is a unit of Chinese government’s state-backed Tsinghua Holdings.

Unisplendour said it would buy 15 percent of Western Digital for $3.78 billion, a deal that is likely to face regulatory scrutiny amid national security concerns.

Western Digital Chief Executive Steve Milligan said in an interview that the SanDisk acquisition will ultimately dilute Unisplendor’s stake and that he was confident it would be approved by regulators.

“There’s always a risk and you’re not done until you’re done, but we were careful and consulted with US government experts,” he said.

Research firm Gartner said in October that worldwide semiconductor sales are expected to fall for the first time in three years in 2015, due partly to increasingly saturated market for smartphones.

Western Digital needs access to SanDisk’s NAND technology to better compete in the market for SSDs used in cloud computing, data centres, smartphones and laptops.

Western Digital said it had the support of SanDisk partner Toshiba which had some rights that could block a deal.

SanDisk has an intellectual property sharing joint venture with the Japanese company and uses its foundries to make chips.

Toshiba spokeswoman Midori Hara said in an email that the deal would not have a negative impact on that joint venture.

 

Analysis: the Western Digital SanDisk buy

WD-LogoThe semiconductor industry’s rapid consolidation proceeded apace as Western Digital agreed to buy SanDisk today for $19 Billion. SanDisk had been shopping itself to potential buyers which also include Micron Technology Inc. The offer values SanDisk [SNDK} at $86.50 a share, a 15% premium on Tuesday’s market close. SanDisk shares rose 5.7% to $79.50 prior to market open – the same shares were trading under $60 a share before rumors spread concerning the firms potential sale.

Western Digital shares dropped 2.5% to $73 in premarket trading having lost nearly a third of their value so far this year. Ironically, both companies reported better-than-expected results for their latest quarters this morning.

The acquisition comes just three weeks after China’s Tsinghua Unigroup Ltd. agreed to pay $3.78 billion for a 15% stake in Western Digital, the latest U.S. tech company scrambling for politically connected (capital source) Chinese partners.

Under the deal Western Digital said it would pay $85.10 a share in cash and 0.0176 shares in stock for each share of SanDisk if the Tsinghua investment closes first. If that deal hasn’t closed or has been canceled, it will pay $67.50 in cash and 0.2387 shares.

SanDisk has missed their earnings estimates for the last three quarters and according to downgrades by market analysts appears to be suffering from poor execution on a number of fronts:

  • Loss of Apple’s SSD business
  • A too optimistic Enterprise strategy – missing 2TB SATA drive solution
  • Poor integration of the Fusion I/O acquisition
  • 3D NAND migration uncertainty – late entry position
  • High margin retail business is slowing
  • SanDisk must renegotiate licensing revenue with Samsung (Aug-16, now 40% EPS)
  • Poor inventory management
  • SanDisk granted 5 U.S. patents last year

Steve Milligan Western Digital CEO will become chief executive of the combined company, located at Western Digital’s base in Irvine, Calif. SanDisk’s CEO Sanjay Mehrotra is expected to join the Western Digital board after the deal closes.

Western Digital expects the deal to add to earnings within 12 months of closing, and will achieve annual synergies of $500 million within 18 months.

TechEye Take

These are tough times in the memory sector. Company’s like SanDisk have been facing increasing price pressures over the last six months that have limited their ability to establish a better than break-even proposition going forward. SanDisk expanded into areas that it was ill equipped to manage ending in their distressed selloff to WD.

Western Digital has been in the process of designing a proprietary non-volatile memory and recently picked up technical people from the failed Contour Semiconductor. SanDisk has lost new product design momentum relying on (from what we can tell) their partner Toshiba to perform the heavy lifting.

Toshiba is having their own set of issues with accounting problems; resignation of the CEO and several board members; and are building a new fab making one wonder why in the world would anyone invest in this mess? Evidently WD has seen a way through. Toshiba seems to be absent from this conversation…., ?

Micron and Western Digital want SanDisk

Sandisk extreme SSDsChipmaker Micron and hard disk drive maker Western Digital are in talks with memory chip maker SanDisk about a possible acquisition.

SanDisk is valued at about $12.6 billion and has hired a bank to help with the process. No decision has been made and the talks may not result in a transaction, but things appear promising.

Shares of SanDisk rose 12 percent to $69.20 in extended trading on Tuesday. Micron was up 3 percent and Western Digital under one percent.

Micron and Western Digital are an odd couple of buyers. Micron already has a significant flash memory operation.

Western Digital mainly makes traditional hard drives. SanDisk’s flash-memory chips are used in solid-state drives, which are faster and more reliable than traditional hard drives.

In fact, many expected a Chinese conglomerate to be a more interested party to potentially acquire SanDisk. China’s government wants to step up its chip industry and has been tipped to buy SanDisk before.

Tsinghua Unigroup offered $23 billion for Micron, but the plan was been clouded by US security concerns. In the end Tsinghua invested $3.78 billion in Western Digital, worth a 15 percent stake.

Analysts have said the cash infusion could allow Western Digital to take bigger steps in flash and solid-state storage, its key interest areas.

SanDisk’s price is low. It has dropped about 37 percent year-to-date as the company dealt with falling prices in the flash memory market.

A delay in sales of certain embedded parts used in solid-state drives has also weighed on the company’s results.

Contour Semi RIP?

Contour-Semi-RIP-2Contour Semiconductor Inc. located in Billerica, Massachusetts, a venture-backed company founded to produce the world’s lowest-cost, high-volume, non-volatile memory chips appears to have ceased operations. Founded in 2001 the company received its first funding in 2004 and had offices in Billerica, Massachusetts and San Jose, California.

Former President, CEO and Board of Directors Saul Zales is now looking for his next challenge. Chief Technology Officer Daniel Shepard and Vice President of Product Development Tom Trent find themselves in new gigs at HGST, a Western Digital Company. Vice President of Marketing and Business Development, Bob Witkow, is no longer listing himself with the company.

What happened?

Contour’s technology focus on taking phase-change memory technology forward to a marketable commodity status never achieved traction with any of the oligarch producers. The company was in development of vertically stacking the phase-change elements to achieve high density devices. The company filed 45 patents on the technology.

An important Contour patent is the Diode Transistor Memory (DTM™) architecture that reduces the number of mask and process steps by as much as 65 percent compared to NAND flash – this results in a nearly three-fold improvement in fab capacity throughput with a corresponding 65 percent reduction in wafer cost compared to NAND.

Contour has been using phase-change as the storage element in their development work. The company indicated that future iterations of DTM™ could include magnetic or carbon nanotube storage elements. In addition to the memory cell, the streamlined fabrication process also includes a single type of n-channel transistor and non-memory diodes which are used for address decoding. Contour’s proprietary circuit techniques have been designed to optimize compatibility with existing CMOS processes.

With its cross-point array architecture, Contour’s NAND-alternative solution supports word, sector, and page-level erase commands to supplement the normal NAND flash specification, allowing significant improvement to system-level performance. Latency is minimized as the chip can directly access and modify any addressable location. With phase change material, individual cell program and erase performance is greatly improved and write endurance has been tested for up to 1 billion cycles.

The company presented at SNIA’s January 2015 Storage Industry Summit indicating that they were working on a 3rd generation device at 4 Gb using 52 nm technology. Sub Rosa commentary indicates that a key portion of the circuitry failed and would require a complete redesign – thus convincing the investment community that any further funding for Contour was not in their best interests. We’ve no reports (as of this writing) that the company’s patent portfolio has been placed up for sale or has been bought.

TechEye Take

One sign the company was in search mode was the admonition that the technology really didn’t necessarily need to use phase-change as the storage elements – offering magnetic and carbon nanotube storage elements instead. The carbon nanotube storage elements most likely resulted from discussions with nearby Nantero in Woburn, Massachusetts.

One rather knotty issue is that Phase-Change has been supplanted by other non-volatile memory technologies. Once a highly proclaimed successor to NAND-Flash it fell to the wayside when it was found that the device would become erased if passed through a solder reflow machine in a production environment preventing them from being gang-programmed prior to the assembly process. The other issue was the high write currents that were not conducive to sub 20 nm scales. The company failed to bend with the will of market expectations until the bitter end – by then it was too late to recover from.

The level of scuttlebutt regarding Contour’s fortunes has been barely audible. The fact that they went out without a whimper is somewhat out of the ordinary – a kind of a “no one left to turn out the lights” situation. The fact that HGST, a Western Digital Company, picked up Contour’s technology people is indicative of Western Digital’s intentions to further establish their own non-volatile research operation.