Hitachi Mum on Reports of Disk Drive Buyout

Won't confirm talks with investment group said to be mulling majority stake in HGST

December 22, 2007

2 Min Read
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Hitachi Global Storage Technologies (HGST) is keeping quiet about rumors that it plans to sell up to 50 percent of its U.S.-based disk drive business to Silicon Valley investment firm Silver Lake Partners.

News of the rumored sale surfaced in a number of media outlets today, following reports in Japan that HGST and Silver Lake were quibbling on price.

Silver Lake declined to comment on the rumor through a spokesperson. HGST spokesman Jim Pascoe sent this statement in an email to Byte and Switch this afternoon:

  • I can tell you that Hitachi, Ltd. is committed to Hitachi GST, as it firmly believes magnetic storage technology is a sound investment in view of the growing market for high-capacity, low-cost storage. Similarly, it believes Hitachi GST is improving its competitive position. Hitachi, Ltd. is doing everything it can to make Hitachi GST even more competitive, healthy and profitable on a sustained basis and it intends to keep and grow its HDD business. Hitachi, Ltd. is looking at various options for continuing investment and growth in its HDD business while accelerating its return to a healthy, competitive position.

If Silver Lake Partners takes a stake in HGST, the move would follow similar investments the financial firm has made in a range of technology businesses, including Seagate, of which it holds a less than 1 percent share.

Hitachi Ltd. issued the following statement yesterday: "Hitachi is focusing on improving the performance of the Hard Disk Drive business, exploring every possibility. However the fact is that Hitachi has not decided to sell the Hard Disk Drive business."It was the second time in four months that Hitachi had said the same thing. On September 27, the company felt compelled to issue the identical statement in response to news reports that it was shopping HGST.

U.S.-based manufacturing and research operations based in California represent a sizeable part of HGST, which IBM sold to Hitachi for $2.05 billion in 2003. Despite owning a sizeable market share (alongside Seagate and Western Digital), as well as continuing to innovate in the 1-Tbyte disk drive space, HGST has reportedly failed to impress its Japanese parent.

Silver Lake Partners also made the news this week, on the report that Charles Giancarlo, 50, has left his post as Cisco chief development officer to become a managing director at Silver Lake.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • IBM Corp. (NYSE: IBM)

  • Seagate Technology Inc. (NYSE: STX)

  • Silver Lake Partners

  • Western Digital Corp.

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