Western Digital enters SSD market with SiliconSystems acquisition

Storage vendor Western Digital announced today that it has completed a $65 million cash acquisition of SiliconSystems, Inc. of Aliso Viejo, Calif.

Storage vendor Western Digital announced today that it has completed a $65 million cash acquisition of SiliconSystems, Inc. of Aliso Viejo, Calif., a leading supplier of solid-state drives for the embedded systems market.

SiliconSystems' portfolio includes SSDs with SATA, EIDE, PC Card, USB and CF interfaces in 2.5-inch, 1.8-inch, CF and other form factors, as well as considerable intellectual property, including its PowerArmor, SiSMART, SolidStor and SiSecure technologies.

The company has sold to network-communications, industrial, embedded-computing, medical, military and aerospace markets since 2002, accouting for approximately one third of worldwide SSD revenues in 2008.

"WD's strong balance sheet, sales reach, and operations and logistics capabilities will allow us to greatly accelerate our penetration of our existing markets, while combining our engineering expertise with WD will enable us to develop new solid-state drives to broaden our overall product portfolio and address the emerging applications for solid-state storage in WD's existing customer base," said Michael Hajeck, a founder and CEO of SiliconSystems, now senior vice president and general manager of WD's Solid-State Storage business unit. "We are extremely excited to be joining WD and enabling an even stronger future for our talented team."

The acquisition makes WD a player in the red-hot SSD industry, and helps fill a major void in WD's portfolio. In a statement, WD president and CEO John Coyne said the acquisition will be "modestly accretive to revenue and margins" and will help the company address a $400 million SSD market, which encompasses consumer netbooks, clients and enterprises.

The new unit will now be known as the WD Solid-State Storage business unit, complementing WD's existing Branded Products, Client Storage, Consumer Storage and Enterprise Storage business units.

Western Digital (WDC) stocks were down $1.23, or 6.31%, in morning trading.

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