Samsung's hard-drive unit sale could lead to massive market consolidation

Samsung's hard-drive unit sale could lead to massive market consolidation

Summary: If Samsung sold its hard drive unit to Seagate, it would put 90 percent of the market share for hard drive sales in the hands of two companies -- Seagate and Western Digital.

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TOPICS: Hardware, Samsung
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Samsung Electronics is quietly trying find a buyer for its hard-drive division and the most likely suitor is Seagate, according to a report in the Wall Street Journal.

If such a deal were to proceed, it would put 90 percent of the market share for hard drive sales in the hands of two companies -- Seagate and Western Digital.

Seagate, the second-largest manufacturer of hard-disc drives behind Western Digital, holds about 30 percent of global hard-drive sales, according to iSuppli. Acquiring Samsung's hard-drive business would add another 10 percent and put it in a better position against Western Digital, which will hold about 50 percent market share when it wraps up its $4.3 billion acquisition of Hitacchi's hard-drive business.

Both hard-drive manufacturers are pursuing an acquisition strategy as perhaps their only path to grow right now, said a March report from iSuppli analyst Fang Zhang.

HDD shipments in the first quarter of 2011 are anticipated to reach 160.9 million units, down 3.9 percent from 167.5 million in the fourth quarter of 2010. Shipments are being impacted by the rising sales of tablets, which don't use HDDs and are cutting into the shipments of mobile PCs, a major market for hard drives. Other factors are affecting HDD sales as well, such as declining PC shipments in all major markets due to the growing use of cloud storage. Amid weaker industry conditions, organic sales growth is more difficult to achieve, prompting HDD suppliers to engage in acquisitions to gain market share.

For it's part, Samsung was finding it hard to compete in against larger rivals and would find it hard yet against a consolidating market. The Seoul, Korea-based company would like to sell the unit for about $1.5 billion, but would accept a $1 billion offer, an anonymous source told the newspaper. The WSJ's source said Samsung would like to use the cash from a sale of the hard-drive business to double-down on a market where it holds better prospects. Samsung is the world's top maker of memory chips and flat screen displays.

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Topics: Hardware, Samsung

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7 comments
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  • You know what?

    GOOD! Samsung hard drives SUCK, and after Seagate and their massive firmware fail after buying up Maxtor - whose last generation of hard drives similarly sucked - they deserve each other. Hitachi hard drives have been far more reliable, and so have WD in recent years. WD has been making all the right purchase decisions, and Seagate has been making all the wrong ones.
    Joe_Raby
    • RE: Samsung's hard-drive unit sale could lead to massive market consolidation

      @Joe_Raby Samsung hard drives are consistently among the quietest, coolest and fastest on the market. Tom's Hardware: "Samsung's HD103SJ is the first desktop hard drive that delivers more than a 150 MB/s maximum transfer rate. It even raises the minimum transfer rate to almost 76 MB/s. To put that into perspective, this is higher sequential throughput result than what we've seen from Western Digital's 10,000 RPM VelociRaptor drive! Writes are equally fast. Streaming read and write performance is almost as quick at over 142 MB/s, leaving the competitors in the dust."
      jgm@...
      • RE: Samsung's hard-drive unit sale could lead to massive market consolidation

        @jgm@... what about Samsung's laptop drives? Any standouts, there?
        LTV10
      • RE: Samsung's hard-drive unit sale could lead to massive market consolidation

        @LTV10 I've never been responsible for sourcing laptop hard drives, so I've never really done an extensive search/review/comparison like I did last year for desktop hard drives. I did read a recent roundup of laptop SSDs that put Samsung's among the best.
        jgm@...
      • Quiet sounds of fail

        @jgm@...

        There's a reason why Samsung hard drives are $10 cheaper than everybody elses on the market - their reliability is crap! MDG (the biggest independent computer builder in Canada) switched from Samsung to WD just because of poor reliability. I have yet to see a Samsung drive without a huge count of ECC errors being processed by SMART too. They are just plain crap, and it's no wonder Samsung wants to ditch the unit.
        Joe_Raby
  • RE: Samsung's hard-drive unit sale could lead to massive market consolidation

    [i]I did read a recent roundup of laptop SSDs that put Samsung's among the best.[/i]

    My understanding is that the three top SSD brands right now are Samsung, OCZ and Intel. At least that seems to be what most people who own SSDs have.

    MLC SSDs are becoming highly competitive so I don't think Samsung will abandon the SSD market anytime soon.
    LTV10
  • RE: Samsung's hard-drive unit sale could lead to massive market consolidation

    Recently bought TWO SAMSUNG SpinPoint F3 502HJ drives. One of them was acting a bit odd so I booted in Linux and started smartctl. Both drives did not have offline smart data collection enabled, which I thought it was odd. I enabled it and started a long smart self test. The drives have been used for 36 and 43 hours respectivelly, yet both drives faild their own tests. The 36 hours of use drive ended up needing over 80 hours of data recovery and block remaping (over 8 000 ralocated sectors until I got tired of the sh&t). Both replaced in service, got my money back and bought a couple of Hitachi's, working like a charm, 140 and 150 max read rates.
    Herr Spiegellman