Samsung Selling Storage to Seagate

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The WSJ is reporting that an anonymous source from within Samsung has come forward to shed a little light on the company’s hard drive storage business. As a distant third player in the HDD market, Samsung has been losing money on the drives. Since losing money hurts, they’ve decided to try and offload it onto someone else.

Apparently Samsung is shopping the division around for the princely sum of $1.5 billion, though the WSJ reports their source as saying that Samsung might go for under a billion. It certainly sounds like they’re trying to make a quick sale. In addition to losing money developing hard drives that can keep up with the bigger guys in the industry, Samsung wants to concentrate their storage efforts on solid state drives.

SSDs have enjoyed a period of massive growth in recent years, and Samsung’s have generally been favorably regarded. The obvious choice for buyers is Seagate, who is undoubtedly looking over their shoulder at Western Digital. WD purchased Hitachi’s drive business and IP just last month and the combined portfolios already control 50% or more of the field. Seagate’s own 29% would be buoyed by the addition of Samsung’s offerings to their business. 

Analysts are already weighing in on the issue, and seem to look favorably upon the deal. If Samsung is unable to find a buyer for the drive division, it wouldn’t surprise onlookers to see them shutter it entirely. Cisco recently went through a similar move when it was unable to find a buyer for its consumer-focused Flip line of camcorders.




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