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Toshiba Taking Interest in Fujitsu's Storage Business

By - Source: Tom's Hardware US | B 0 comment
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Toshiba, one of the world’s largest flash memory manufacturers, is taking heavy interest in Fujitsu’s storage division.

According to reports from Financial Times, Forbes, Nikkei Interactive and many other coverage sites around the web, Toshiba is now in the latter stages of negotiations with Fujitsu in a move that could see Toshiba purchasing the storage division somewhere in between US$340M and US$450M. The move is said to allow Fujitsu to move away from one of their unsuccessful hardware businesses, as many of the other storage industry giants such as Seagate and Western Digital already have such a firm stronghold.

Quoting Damian Thong, an analyst for Macquarie Securities in Tokyo, whom believes the price tag on the offer is fair and reflects the situation appropriately: "It's clearly at a discount to global hard-disk players, but that reflects the losses in Fujitsu's business,"

Thong also added that the price could end up proving to be high if the economic downturn continues.

In the last quarter of 2008, there were talks of Western Digital offering an even larger stack of money to buy out Fujitsu’s hard drive business, hoping to come to a deal by the end of the year. But that has yet to materialize, however Western Digital also supports the Toshiba offer since the economy has been taking a steady turn down the other side of the bell curve. The original offer from Western Digital was said to be between US$660M and US$950M, quite a bit more than what Toshiba is now offering and apparently getting somewhere with.

If the Toshiba offer is accepted, there could be some impact for Apple MacBook users – a positive one of course. Since Toshiba already has a strong placement in the market for flash drives, chips, and cards, MacBooks which currently use mostly Fujitsu drives could start seeing more Solid State Drives (SSD) being introduced.

One would expect that no matter what happens, storage product pricing probably will not fluctuate much since it is still based on other factors such as supply, demand and competition pricing. For now, we will just observe from the sidelines.

Original sources here and here.

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