Seagate Signs Deal with Samsung to Expand Business in China and Southeast Asia

By Rajani Baburajan April 25, 2011

Seagate Technology, hard disk drives and storage solutions provider, and Samsung Electronics, digital consumer electronics and information technology major, announced a $1.375 billion deal involving many transactions and agreements.

Seagate will pay $1.375 billion to Samsung in the form of 50 percent stock and 50 percent cash to buy Samsung’s hard disk drive (HDD) division.

The deal is expected to assist Seagate to significantly expand customer access in China and Southeast Asia. With the supply agreements, Seagate will secure an important source of NAND flash supply as the company expands its SSD and solid state hybrid product offerings. Seagate will become a significant supplier of disk drives to Samsung.

Both the companies signed a NAND flash memory supply agreement under which Samsung will provide Seagate with its semiconductor products for use in Seagate’s enterprise solid state drives (SSDs), solid state hybrid drives and other products.

They also signed a disk drive supply agreement under which Seagate will supply disk drives to Samsung for PCs, notebooks and consumer electronics. They will expand cooperation between the companies to co-develop enterprise storage solutions.  

The main attraction of the deal is that Samsung would be receiving significant equity in Seagate. An executive of Samsung will be joining Seagate’s Board of Directors.

“With these agreements, we expect to achieve greater scale and deliver a broader range of innovative storage products and solutions to our customers, while facilitating our long-term relationship with Samsung,” said Steve Luczo, chairman, president and CEO of Seagate, in a statement.

These strategic decisions will enable both companies to better align their product development efforts and roadmaps, accelerate time-to-market for products. Seagate can also strengthen its relationship with TDK Corporation/SAE Magnetics.  

“Samsung looks forward to extending our existing strategic ties with Seagate, to deliver creative technology solutions for a broad diversity of consumer, business and industrial applications,” said Oh-hyun, Kwon, president of the semiconductor business of Samsung Electronics.

Recently, Seagate announced that Albert 'Rocky' Pimentel joined the company as executive vice president of worldwide sales and marketing. In his new role, Pimentel will lead the global team comprising Sales, Sales Operations, Product Line Management, Marketing and Retail.

Rajani Baburajan is a contributing editor for TechZone360. To read more of Rajani's articles, please visit her columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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