Toshiba buys part of WD's HDD business

Toshiba will acquire part of Western Digital's 3.5-inch HDD (hard-disk drive) production equipment and related intellectual property, in return for the Japanese IT vendor's 2.5-inch HDD manufacturing facility in Thailand.

"The purchase of part of Western Digital's 3.5-inch HDD manufacturing equipment, and with it the capability to produce 3.5-inch HDDs for desktop PCs, DVR and other consumer applications, will expand Toshiba's portfolio and enable the company to supply products covering all segments of the HDD market," the company said in its statement released Wednesday.

It added that in return, Western Digital will acquire Toshiba Storage Device (TSDT)--the company's wholly-owned HDD manufacturing subsidiary located in Thailand--including the principal assets of TSDT, its Thailand property, facilities, and employees.

According to Bloomberg, Toshiba spokesperson Toru Ohara said the company intended to double sales of memory devices including hard drives to 800 billion yen (US$9.8 billion) in the year, ending in March 2015, from about 400 billion yen this business year.

Toshiba expects the global market for HDD and other storage devices to see sustained demand growth. [The market would be] driven by the continued diversification of devices requiring storage, including PCs, tablets and smartphones, and the explosive increase in data storage and archiving that will accompany cloud computing," it added in its statement.

The Japanese vendor and Western Digital aim to complete the acquisition and transfer by March this year after obtaining approval from the relevant authorities.

Western Digital, based in California, is divesting the equipment to address regulatory concerns over its planned acquisition of Hitachi Global Storage Technologies, the company said in its statement.

The deal also comes as the HDD manufacturing industry in Thailand recovers from major flooding in the country last year, which rattled the global supply chain.