The number of players in the disk drive market has again been reduced. This time it is Seagate (STX) taking over the HDD division from Korean Samsung. Last time it was competitor Western Digital that took over Hitachi’s drive business.
Seagate has paid Samsung just under $2 billion and in return Samsung gets a stake in the combined business of Seagate and Samsung.
On top of that Samsung gets to deliver NAND flash to Seagate. This contract points to the fact that Seagate in earnest will start selling SSD’s. An area that it so far has not entered at all, but which carries higher margins than traditional hard drives, where you don’t make many dollars for each drive you manufacture.
While the acquisition is good news for the industry it will hardly benefit the consumers. Fewer suppliers have a tendency to lead to increasing prices.S|A
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