Seagate's brave buy of Samsung's hard disk drive unit will mean that it moves closer to the top of the market.
According to research outfit IHS iSuppli, the acquisition means Seagate will now mean a combined shipment accounting for two-fifths of an HDD market worth 652.4 million units in 2010.
In order to get to this theory the company used end of year figures from 2010. It said that HDD shipments gained from both Seagate and Samsung totalled 261.2 million units. This figure, it added was "enough to give the combined companies 40 percent of the HDD market", and this would land Seagate at number two for the end of the year.
Separately, Seagate’s shipment share in 2010 showed 195.2 million units, while Samsung’s HDD business brought in 66.0 million units. And it seemed that without the merger, Seagate’s shipment share of market would have stood at 30 percent, while Samsung would have scraped the barrel at a piffling 10 percent.
However, even the combined revenue won't be a match for giant Western Digital, which according to IHS iSuppli retains overall market leadership in HDDs. It pointed out that only one month prior to the Seagate purchase, Western Digital had made its own acquisition by buying Hitachi Global Storage Technologies.
This clever buy meant that 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, landing it number one in HDD space with a 50 percent market share.
And it seems both buys have caused a rippled in the HDD market, meaning that the overall sector now only has three major players as opposed to the five it had before.
Left lingering after Western Digital and Seagate is Toshiba/Fujitsu, which had shipments in 2010 of 71.7 million units, or a 10 percent share of the HDD market.
Fang Zhang, analyst for storage systems at IHS iSuppli, said that the overall reduction from five to three manufacturers "considerably improved the stability and efficiency of the HDD industry."
However, he pointed out that the buy also signalled a recognition by Seagate and Samsung that conditions in the storage space would "become more challenging in the future.”
The transaction, valued at $1.38 billion, gives Seagate access to Samsung’s NAND flash technology and gave Seagate access to Samsung’s clients in the Asian market. By obtaining Samsung’s HDD business, Seagate also has made great strides in closing the gap with its perennial competitor, Western Digital.
And it seems that Seagate is making the most of its new HDD status. Today the company has announced what it claims is the "world’s first" 3.5-inch hard drive featuring 1TB of storage capacity per disk platter, breaking the 1TB areal density barrier.
The GoFlex Desk products will be the first to feature the new hard drive, which can offer storage capacities of up to 3TB and an areal density of 625 Gigabits per square inch. The drive will also be available in capacities of 3TB, 2TB, 1.5TB and 1TB.