The acquisition and transfer should be completed by March this year, 2012

Feb 29, 2012 08:54 GMT  ·  By

Two of the world's remaining three hard drive makers have announced an agreement for the acquisition and/or transfer of some of their manufacturing assets.

Western Digital, once it finishes all the procedures involved in the Hitachi acquisition, will be the undisputed king of HDDs. It basically already is, really.

Seagate will be left with second place, while Toshiba will hold a slightly distant third position.

Toshiba and Western Digital have now announced a pact through which the former will buy part of the latter's HDD manufacturing equipment.

Part of what Toshiba gains is manufacturing equipment for 3.5-inch HDDs for use in desktop PCs and other consumer applications, along with related intellectual property.

The rest is made up of manufacturing equipment for near-line HDDs for server applications.

Western Digital, for its part, will gain control of Toshiba Storage Device (Thailand) Co., Ltd. (TSDT), Toshiba's wholly-owned HDD manufacturing subsidiary located in Thailand.

All proceedings should be complete by the end of March, 2012. All that remains is to get approval from relevant authorities.

Western Digital will no doubt use its new facilities as substitutes and/or supplements for its own Thailand-located factories.

After the flood that shut down most of them last year, the HDD giant has to do everything it can to recover.

As for Toshiba, it will rely on WD's manufacturing equipment for making 3.5-inch HDDs for desktops, DVRs, other consumer applications, etc. It will also boost its supply capacity for near-line HDDs used in servers.

Finally, by handing over TSDT, it will focus HDD production in the Philippines and at a contract maker in China. This, it hopes, will boost manufacturing efficiency.

What does this mean for us consumers? Not much. Hard drives will stay overpriced for most of the year regardless, even though it is already bad enough that, even with worldwide HDD supply at about 80% of pre-flood levels, prices continue to be huge for some obscure reason.