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Monday, April 18, 2011
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Samsung Considers Selling Its Hard-Disk-Drive Unit
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Samsung may be looking to sell its money-losing hard-disk-drive business for $1.5 billion, the Wall Street Journal reported on Sunday.
The newspaper, citing a person familiar with the matter, reported that
Samsung would use proceeds from the sale to invest in new, higher growth
areas. While it would likely seek $1.5 billion, it might consider
selling the money-losing division for $1 billion, according to the
report.
One potential buyer for the hard-disk-drive business would be Seagate
Technology, the paper added.
"I think it"s a plausible scenario considering the rising popularity of NAND flash chip-embedded digital devices such as tablet PCs and even smartphones," So Hyun-chul, an analyst at a local brokerage of Shinhan Financial Investment told The Korean Times today.
Samsung has not commented on the report yet.
The S. Korean company has struggled in the hard-disk-drive business, which has become
even more competitive with Western Digital's plan to buy Hitachi's hard-disk-drive unit (Hitachi
GST) for $4.3 billion.
Samsung failed to meet expectations, tentatively reporting lower profits in the first quarter (Q1) this year. The company announced that it will invest $20 trillion into new businesses by 2020. In this context, selling the HDD unit could be one way to raise cash for new businesses.
Samsung's abandoning of the hard disk drive business could also make room for the rise of next-generation storage devices called solid-state drives (SSDs).
Samsung has been reportedly shipping SSDs to Apple, though the company has not officially confirmed it.
Samsung is a second-tier player in the hard disk drives industry with market share at around 10 percent after Western Digital and Seagate, according to market research firms. |
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