
Samsung Sold its Hard Drive Business to Seagate for $1.4 Billion - ask995
http://bits.blogs.nytimes.com/2011/12/20/seagate-samsung-acquisition/
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wazoox
WD and Seagate now make 87% of all disk drives. Unsurprisingly, they just
slashed warranty on various drives down from 5 to 3 years, and even down to
only 1 or 2 years for some models. Oligopoly will suck for us consumers.

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kirpekar
True, only if the WD HGST merger goes through.

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wazoox
The UE authorized the merger, AFAIK they're only waiting for the Chinese green
light.

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kirpekar
EU approval is only conditional. US SEC and China are still pending. Cannot
comment on the chances of it going through.

I work at HGST.

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jitbit
$1.4 billion, mates. $1.4 billion for a business with manufacturing plants,
complicated global logistics... Now let me remind you that Facebook is valued
85 (!) times more.. o_O

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blub
Stock market valuations are almost useless... unless you work with stocks.

If Facebook disappeared tomorrow, nothing of value would be lost and another
web site would take its place.

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antirez
Not really, what disappears is the Facebook "potential" to make money, and the
valuation is done thinking at this possibility. Now if you look at it in this
way, billions of people using Facebook can be monetized probably much better
in the long run compared to selling a new HD from time to time to millions.

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vasco
What amazes me is that people actually think this is the right way to look at
things...

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jlarocco
Meh. It's an opt-in system.

If somebody is more concerned with something else there's nobody forcing them
to focus on making money.

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sunchild
Actually, it's not purely opt-in. Remember when our tax money "rescued" the
banks because of their reckless lending/investments less than two years ago?

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jlarocco
Ouch. Valid point.

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ars
And then there were 4[1]. And soon to be 3[2]. And one of those doesn't make
many drives[3].

So we have a duopoly in hard disks. I'm quite surprised regulators allowed
this deal.

[1] Seagate, WD, Hitachi, Toshiba

[2] WD is buying Hitachi

[3] Toshiba doesn't make many drives, and only makes 2.5 inch and smaller.

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nextparadigms
Are they all from the same country? Either way, the PC industry and the
related component industry is fading away, so Samsung did the right move here.
They probably want to focus more on the mobile markets.

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pyre
Right. We're entering the post PC era. Pretty soon everything will be done on
tablets or 'in the cloud.' Neither of which require hard drives.

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derobert
Where exactly do you think data 'in the cloud' is actually stored?

Given, this may well require _fewer_ hard drives (due to better capacity
utilization), but still requires hard drives.

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wofser
1.4B or around 980M formatted.

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wmf
So it's now Seagate, Western Digital, and Toshiba. Signs that innovation has
moved elsewhere, perhaps.

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apike
Apple is the largest buyer of SSDs in the world, but their largest supplier
has been Samsung, a company they've been increasingly at odds with in the
phone business.

In one day, it is announced that Samsung has sold this business, and that
Apple has purchased a competing SSD supplier. Just like that, the shape of the
market shifts dramatically.

~~~
forgottenpaswrd
"In one day, it is announced that Samsung has sold this business, "

Not really, they had sold the hard drive business, but not the SSD business.
Read the article, you will notice it says that it provides Seagate a LINK with
the SSD business, not with the business itself.

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rkalla
For anyone that is curious about Seagate's SSD play and have been waiting for
them to do something customer-facing for a while now: they have actually been
doing enterprise flash storage for years, but I would assume through this
acquisition we will now see official customer-facing drives being sold next
year.

Likely rebranded Samsung 830s for starters (which is a solid drive) and
hopefully get some updates and a common controller/firmware between the
consumer drives and enterprise drives in 2014/15 to bring them in more a
competitive lineup with the SanForce controllers that are dominating (note:
still waiting to see what the 3rd gen Intel's perform like, they may change
the landscape. Hard to say at this point).

Not thrilled to see only two options when it comes to spindle drives, but I
imagine those aren't long enough for this world to really create a hub-bub.

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chalst
"Most of the world’s disk drives are not able to be built because Thailand is
underwater”

Consolidation when supply is depressed is anticompetitive.

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wmf
This deal was decided months ago, as was the WD/HGST acquisition.

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chalst
It's not clear to me where you're going with that observation.

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wmf
Should they cancel an acquisition because of a temporary manufacturing
problem? IMO the flooding shouldn't affect our thinking about whether these
deal are competitive or anticompetitive.

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chalst
When there are few suppliers, depressed demand makes it easy for oligopolists
to behave like monopolists.

Should they cancel the deal? Certainly their shareholders wouldn't like them
to do it out of the kindness of their hearts. I do think that competition
watchdogs should be looking at HD mfers very closely now.

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vondur
I'm surprised that they sold the SSD business. I'm guessing that's primarily
what Segate was after.

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ghc
They did not sell their SSD business. They sold their Hard Drive business.

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fletchowns
"The agreement gives Seagate select elements of Samsung’s hard drive business,
including Samsung’s high-capacity M8 hard drives and semiconductors used to
make solid-state drives"

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ghc
Samsung will continue to make SSDs and other products based on its NAND
business, but Seagate will gain NAND supplied by Samsung that it needs to
launch its own SSD business along with acquiring the entire Samsung HDD
business.

This was probably the only way for Seagate to complete the deal. Samsung's
NAND business is probably more valuable than the entirety of Seagate.

Here's the rundown: [http://www.seagate.com/ww/v/index.jsp?locale=en-
US&name=...](http://www.seagate.com/ww/v/index.jsp?locale=en-US&name=samsung-
seagate-alignment-announce-
pr&vgnextoid=d00a78162ab6f210VgnVCM1000001a48090aRCRD)

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kephra
Thats bad, because the Samsung discs had a much better quality than Seagate or
Western Digital. We now have a monopoly of two low quality discs.

~~~
thebigshane
Duopoly.

Incredibly interesting list of existing duopolies:
<http://en.wikipedia.org/wiki/Duopoly#Examples_in_business>

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protomyth
As of late, Seagate drives have been pretty crappy, which is a real shame
given their former glory. Maybe this purchase will change something.

~~~
wazoox
Storage professional here. Disk drives failure rate is usually 0.5 to 3% a
year. Drives do fail, so you can't draw any statistical significant figures
from the failure of a couple of drives among a total of four or five (or even
ten or twenty).

However my company's selling drives by the thousands, and here's what I can
say: Seagate barraccuda are the worst pieces of crap being sold since the
infamous IBM 80GB debacle; their failure rate is 10% a year, no less.
Unsurprisingly Seagate just dropped their warranty to ... 1 year! Keep away
from these at all costs...

Seagate Constellation seem to be OK but I only have a few of these.

Hitachi 1, 2 and 3 TB look impressive: 1 failure among 2 thousand drives, in 2
years.

WD seem OK, but I haven't nearly enough of them to get significant numbers (a
couple hundreds).

~~~
pasbesoin
Unfortunately, I recently picked up a couple of Barracuda because of a price
break fluke that let me essentially escape the flooding price inflation.

I guess I will use them with trepidation (redundant backups, mostly sitting on
a shelf) and plan to phase them out in the coming year and/or into transient
cache.

Thanks for the heads up.

P.S. I was set to go with Hitachi (2 TB 7200 RPM) when their prices more than
doubled on me. Price aside, are they still a good bet like they were a couple
of years ago? (I recall reading that at one point Google was favoring them.)

Also, since I'm adding a postscript, does anyone recall the HD failure rate
study that someone put out a few years ago? Of course, things change, but
behind the particular models in seem to recall some useful inferences about
company/brand quality/reliability.

~~~
wazoox
There were several interesting studies these past years : one from google, one
from NetApp, an older one from the CERN:

Google 2007: <http://research.google.com/pubs/pub32774.html>

Carnegie Mellon 2005:
<http://www.usenix.org/events/fast07/tech/schroeder.html>

CERN on data integrity:
[http://indico.cern.ch/getFile.py/access?contribId=3&sess...](http://indico.cern.ch/getFile.py/access?contribId=3&sessionId=0&resId=1&materialId=paper&confId=13797)

NetApp 2010: <http://synergy-ds.com/netapp/wp-7005.pdf>

~~~
pasbesoin
I may be remembering the Google study and/or something else from about that
time frame. I have a vague recollection now of both Google's opinion and and
something else that had at least some degree of separation from Google.

Thanks very much for the informative response. I'll have a look at these (as
soon as I talk myself down sufficiently from my guilt over my price-motivated
Seagate purchase ;-).

In part, I also pushed the button on Seagate (despite the 1 TB "click of
death" episode from a few years ago) because a recent WD laptop HD purchase
went rather bad with incessant parking that is apparently inherent to the
model's firmware. I finally fixed that on the XP Pro machine it lives in by
finding and setting to run on start-up:

<http://sites.google.com/site/quiethdd/> [1]

But not before SMART reported significant aging for the drive. Which rather
pissed me off. (I should pull it and RMA it -- 5 year warranty.)

So, that helped lead me to Hitachi. Then the price inflation, plus the news
that WD is buying Hitachi, and I figured I'd give Seagate another go.

I hate purchasing consumer electronics, these days.

\--

1\. Which I found at about the same time I learned I could tweak the relevant
settings manually -- so, I went with the pre-packaged implementation.

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prodikl
With samsung the world leader in ram I would have thought they could've done
some great things in ssd field. Bummer.

~~~
wmf
As the largest flash vendor, Samsung may win no matter which controllers are
used. Seagate has no consumer SSDs so I can understand why they want to buy
that business from Samsung.

~~~
prodikl
Ah, the good 'ol iPhone bundling tactic. I'm definitely not an opponent of
sticking to what you're good at, and doing it best. And with this deal, I
guess that's what's happening with both companies!

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seqastian
1.4B .. money they will need to keep investors happy while burning money on
smartphones

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j45
Glad the sale wasn't the other way.

I remember when Seagate first bought Maxtor.

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andrewfelix
In the short term this is good for Seagate. In the long term though, I think
this is good for Samsung. More and more of our memory needs are being met by
online storage.

Sure we'll need NAND going into the future. But are we going to need it in the
quantities that we currently demand when cloud storage is becoming more and
more popular?

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bentlegen
Online storage providers still need to purchase hard disks.

~~~
andrewfelix
Online storage providers don't use NAND, and they won't be consuming drives at
the same rate as consumers.

