SAN JOSE, Calif.--Seagate Technology LLC will control an estimated 40 percent of hard disk drive (HDD) market following its previously announced aquisition of Samsung Electronics Co. Ltd.s HDD business, according to market research firm IHS iSuppli.
In total, combined HDD shipments by the two firms accounted for two-fifths of an HDD market worth 652.4 million units in 2010, according to IHS research.
HDD shipments from both Seagate and Samsung in 2010 equated to 261.2 million units—enough to give the combined companies 40 percent of the HDD market, or a No. 2 finish for the year, according to IHS. Seagate’s shipment share in 2010 showed 195.2 million units, while Samsung’s HDD business brought in 66 million units, IHS said.
Without the merger, Seagate’s shipment share of the 2010 HDD market would have stood at 30 percent, and that of Samsung would have topped out at 10 percent, IHS said.
Even with the merger, Western Digital Corp. retains overall market leadership in HDDs, the primary storage medium for desktop PCs and most notebook computers, according to IHS.
Only one month prior to the Seagate purchase--announced on April 19--Western Digital made its own acquisition, purchasing Hitachi Global Storage Technologies, IHS noted. Western Digital’s shipments of 203.7 million units, together with Hitachi’s 115.8 million, coalesced to produce total 2010 shipments of 319.5 million, putting owner Western Digital at No. 1 in the HDD space with 50 percent market share, IHS said.
With the completion of the two mergers, the HDD battleground has been effectively whittled down to just three players from five, IHS said. Left standing far behind in third place is Toshiba/Fujitsu—itself the eponymous product of a merger in 2009, IHS said. Toshiba/Fujitsu had shipments in 2010 of 71.7 million units, or 10 percent share of the HDD market, according to the firm.
"Overall, the reduction from five to three manufacturers considerably improves the stability and efficiency of the HDD industry," said Fang Zahang, analyst for storage systems at IHS. "However, the acquisition also signals a recognition by Seagate and Samsung that conditions in the storage space will become more challenging in the future."
The transaction, valued at $1.38 billion, enhances Seagate’s access to Samsung’s NAND flash technology and gives Seagate access to Samsung’s clients in the Asian market, IHS said. For Samsung, the acquisition reorients its storage focus on solid state drives, a rival technology for HDDs, while freeing the company to allocate resources and develop growth in other segments where the South Korean giant has interests, like the semiconductor foundry business, according to IHS.