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By | Chris Mellor 28th April 2010 10:06

WD buys Hoya sputtering operation

Begins to build its own glass house

Western Digital is buying Hoya's glass media sputtering operation to secure and expand its 2.5-inch media supply as demand for these small disk drives ramps up and up.

Hoya is a Japanese optical equipment supplier, and media sputtering is a process whereby atoms are ejected from a solid material and form a thin film on the surface of a substrate, in this case a 2.5-inch glass platter that ultimately becomes a hard disk drive platter.

Western Digital (WD) is buying the facilities, equipment, intellectual property and working capital of Hoya's Tuas, Singapore operation and expects to employ the entire workforce. It's also getting some related equipment at Hoya's Nagasaka, Japan research and development facility and a multi-year glass substrate supply commitment from Hoya.

The all-cash acquisition is expected to close in the current calendar quarter, totalling ¥22bn ($235m). Stifel analyst Aaron Rakers says WD has about $2.826bn in total cash and investments, so the cost is easily affordable.

WD says the operation is a good geographical fit with its supply chain and should fit right in with its existing operations. Once it is integrated into WD's supply chain the company expects to become more efficient and boost its gross margin. ®

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