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By | Chris Mellor 29th February 2012 11:48

Toshiba swaps flood-soaked Thai plant for WD disk biz

Will that make the European Commission happy?

It's as if we were tipped off: Toshiba is buying the 3.5-inch disk drive operations that WD has to sell to gain EU approval for its Hitachi GST acquisition.

At the same time, Toshiba is transferring to WD its flood-ravaged HDD manufacturing subsidiary in Thailand, Toshiba Storage Device (Thailand).

Western Digital said: "TSDT manufactured hard drives but has not resumed operations after the recent Thailand flooding. The principal assets of TSDT are its Thailand property, facilities and employees... WD plans to integrate these facilities and employees into its Thailand operations."

The financial terms of the two agreements were not disclosed and the hope is that the entire WD-Hitachi GST-Toshiba group of deals will close in March. WD faces a $250m penalty payment to Hitachi GST if the acquisition deal does not close by 7 March.

Toshiba gets:

  • Manufacturing equipment and IP for desktop PC drives, DVRs and other consumer applications
  • Manufacturing equipment for nearline drives for servers.

The entire deal is subject to WD's Hitachi GST acquisition being approved by the relevant antitrust authorities. If consummated it will enable Toshiba:

to supply products covering all segments of the HDD market. It will also expand Toshiba's supply capacity in the market for near-line HDDs, which is expected to expand with the continuing growth of the server market, further reinforcing a strategic segment of the company's HDD business.

Toshiba will consolidate its HDD manufacturing at a plant in the Philippines and a contract manufacturing site in China. It said it aims "to establish itself as the leading provider of integrated storage solutions - the company that has all three key storage solutions: NAND flash, SSD and HDD."

Roughly speaking, the HDD industry will divide into three players in a 40-40-20 split: Seagate will have 40 per cent of the business, as will Western Digital, leaving Toshiba with 20 per cent. ®

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