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Toshiba to acquire Fujitsu hard-drive operation

Fujitsu will hold on to 20% for unspecified period

Toshiba has provisionally acquired Fujitsu's loss-making hard-disk drive business for an undisclosed amount.

As a first step towards the acquisition Fujitsu plans to bring its hard-disk drive operations together in a single company in which Toshiba will acquire an 80 percent stake. Fujitsu will hold the remaining 20 percent stake for an unspecified length of time after which it will become a wholly-owned unit of Toshiba.

Toshiba already has a hard-disk drive business although it's not focused in the same area as Fujitsu. Toshiba's drives are targeted at laptops, mobile devices, consumer electronics and automotive applications while Fujitsu aims its products primarily at the enterprise space. It has a roughly 25 percent share of that market, according to IDC.

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Through the acquisition Toshiba said it intends to enter the market for server and data storage system applications. The deal also allows Toshiba to build-up its solid-state disk (SSD) business.

SSDs are hard-disk drive-like devices that store data on flash memory, of which Toshiba is a leading producer, instead of a revolving magnetic disc. The drives have several advantages over HDDs although are more expensive, which has led to limited use.

Around 10.1 million SSDs were shipped last year, according to IDC. The analyst also predicts the market is set for big growth over the next few years as performance improves and the drives get cheaper. In 2012 IDC expects SSD shipments to hit 89.3 million units.

The deal covers Fujitsu's HDD design, development, manufacturing, sales and other related functions carried out by the company except its hard-disk head production and media business. Fujitsu will sell its hard-drive media business to Japan's Showa Denko and plans to closedown its head production operations.

Fujitsu's hard drive operations have been on the block for several months.

See also: Fujitsu kills hard disk drive head production


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