14 DAY TRIAL // It looks like serious changes are happening on the hard disk drive market, one of them involving Samsung's sale of its entire HDD business to Seagate, as part of an agreement that also touches on their existing patent cross-license agreement.
With the rise of solid state drives and the reduced use of mini HDDs in consumer electronics, sales of hard disk drives have been falling.
As such, certain players have been renouncing their roles in his field, so as to focus on other things.
Western Digital, for instance, bought Hitachi for $4.3 billion, becoming the greatest HDD supplier in the world by far.
Now, it seems Seagate is making a purchase of its own, something that was hinted at not long ago, when Samsung was reported to be considering a total sellout of its HDD storage business. Now, a press release confirmed those suspicious while.
Apparently, not only will Samsung's whole HDD division be absorbed into Seagate, but the former will also provide the latter with NAND Flash memory products, for SSD development.
Meanwhile, Seagate will have to supply Samsung PCs and consumer electronics with disk drives when required.
Furthermore, the cross-license agreement between the two has been extended and a shareholder agreement reached, under whose terms a Samsung executive will join Seagate's Board of Directors.
All in all, Seagate will pay Smasung the sum of $1.375 billion USD, 50% in stock and 50% in cash.
“We are pleased to strengthen our strategic relationship with Samsung in a way that better aligns both companies around technologies and products,” said Steve Luczo, Seagate chairman, president and CEO.
“With these agreements, we expect to achieve greater scale and deliver a broader range of innovative storage products and solutions to our customers, while facilitating our long-term relationship with Samsung.”
“Delivering value to the market and consumers is the primary goal of the extensive agreement announced today. Samsung looks forward to extending our existing strategic ties with Seagate, to deliver creative technology solutions for a broad diversity of consumer, business and industrial applications,” said Oh-hyun, Kwon, president of the semiconductor business of Samsung Electronics.