Hitachi, Fujitsu to Run Away From Miniature HDD Business

Japanese storage solution provider Hitachi Global Storage has officially shut down production of 1-inch hard drives, and considers to terminate the 1.8-inch hard drives line as well. The miniature hard-disks were used in digital music players and video cameras, and lost a considerable amount of market with the advent of flash-based storage devices.

The Japanese manufacturer will focus on the larger 2.5-inch and 3.5-inch drives for laptop and notebook use, as large-capacity drives continue to sell well. Hitachi is not the only one to turn its back on miniature drives. Fujitsu announced that it will terminate its 1.8-inch HDD business.

Strange thing, as the company has previously invested plenty of capital and effort for co-production with the US-based drive maker Cornice. Fujitsu made it official that it will shift its focus to flash-based storage devices.

These moves in the miniature hard-disk drive sector will leave Toshiba as the largest maker of 1.8-inch hard drives. Market researcher iSuppli estimates that Toshiba snatched 70 percent of the 1.8" HDD market, while Hitachi only went for 17 percent. Other players in the miniature HDD business are Samsung Electronics and Seagate Technology, that only deliver 8 and 5 percent of miniature hard drives, respectively.

Recently, Hitachi was reported to sell half its hard drive business to US investment firm Silver Lake Partners, but company officials rushed to ensure that the company is "focusing on improving the performance" of its storage business rather than getting rid of it. However, Hitachi has failed to post a profit in its hard drive business since 2002, when the company purchased IBM's hard-disk drive manufacturing units for $2 billion. Hitachi's official position was that the company is still "exploring every possibility and it is not a fact that Hitachi has decided to sell the hard disk drive business."