Hard decision
Bit of a Monday morning rumour this, but intriguing enough to warrant repeating. The WSJ has reported on a single anonymous-source rumour that Samsung is considering selling its hard disk drive (HDD) unit for $1-$1.5 billion.
The reason Samsung is looking to get out of the HDD game, according to the report, is that systems are increasingly being built with solid state drives (SSDs), and that this trend has accelerated with the introduction of the SSD-toting Apple iPad.
"Samsung is considering selling its HDD business as it is not strategic to succeed; [Samsung] is neither a follower or a leader in the business, and it's making a loss," said the Samsung Deep Throat. "$1.5 billion seems a reasonable price to sell, it could even be sold for under $1 billion as Samsung is trying to get rid of it."
Samsung apparently accounts for 11 percent of the global HDD business, but has found itself increasingly dwarfed in that market by the two big specialist players - Seagate and Western Digital - which have acquired many of the smaller players over the years. The only other major HDD-maker is Toshiba.
If the sale did happen, Samsung would presumably reinvest the proceeds in its own SSD operations, which seem to be doing well. Another recent rumour, this time from AnandTech, is that Apple is replacing the SSDs in its MacBook Airs. Currently they're made by Toshiba, but it looks like the Samsung one they're replacing it with is faster.
The HDD business is unlikely to go away anytime soon. The cost per GB will remain significantly lower than in SSDs for some time yet, so in most non-mobile settings HDDs remain the preferred choice. But as in any mature market, margins are tight and only the largest players are likely to survive. Samsung may well have decided the future is SSDs.
