Western Digital announced today that they have entered in to an agreement to acquire SanDisk for approximately $19 billion. Western Digital is one of the few remaining hard drive manufacturers, but their only presence in the solid state storage market has been the enterprise SSDs sold by subsidiary HGST. SanDisk's joint venture with Toshiba on the other hand - one of the four major manufacturers of NAND flash - allows SanDisk to develop a wide range of solid state storage products. This acquisition will give Western Digital some much-needed diversification and potential for growth as hard drives are becoming a niche storage medium.

Without a major SSD-related acquisition, Western Digital would have faced diminishing relevance or the daunting task of carving out a significant piece of the highly competitive SSD market. Over the past several years the solid state storage industry has seen a lot of consolidation, leaving Western Digital with few options for acquisition, of which SanDisk was the largest they could afford.

However even with the acquisition Western Digital won't enjoy the same status in the SSD market that they have had in hard drives. Toshiba and SanDisk are lagging behind in the transition to 3D NAND, having only just started installing manufacturing equipment in their new fab that is intended to start production in the first quarter of 2016, a year and a half after Samsung's 3D NAND drives hit the shelves. SanDisk has also not established a large presence in the mainstream SSD controller space, relying on third-party controllers while their competitors have been striving for more vertical integration. SanDisk's 15nm NAND will probably go down in history as the most advanced planar NAND process but they're running out of time for it to make a significant impact on the market.

Western Digital expects the deal to be closed in the third quarter of 2016. The acquisition will give their future more security, but they'll still have to work hard to stay a major player in the long run.

Source: Western Digital

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  • DanNeely - Monday, October 26, 2015 - link

    Until SSDs become cheaper per GB for bulk (consumer) and semi/offline (enterprise) data storage a market for high capacity 3.5" HDDs will still be around. In the medium term, the enterprise portion of the market should be big enough to sustain the R&D costs which then trickle down to mass market consumer devices like your worst buy specials (which have never been priced at a level to recover significant R&D money). The hollowing out of the middle of the market (HDDs in mid/high end laptops/desktops and general purpose servers); will slow the rate of R&D down; but give or take what would've been the final HDD generation before SSDs overtake in dollars/gb for cheap storage (which may end up being axed out of fear that it might not break even before being obsoleted) I'd expect R&D to continue until the transition point with the HDD companies continuing to churn out the last model they designed until OEM design finally vanishes. Reply
  • iwod - Wednesday, October 21, 2015 - link

    If the CEO of any one of the HDD company think like that I would not own their Stock.
    Enterprise Storage is NOT massive. As @jjj have stated, and it wont grown forever. The increase in Enterprise unit will properly never make up for the lost of consumer electronics.
    It is also worth noting 3D NAND has a very bright future ahead, so far they do not see a ceiling in 3D NAND stacks, with roadmap of up to 512 layers, we may see 1024 layers ( we dont know, this is likely 8 years down the road ) and that does not include smaller nodes or Quad Level Cell to increase capacity. If you were worrying about the P/E cycles, as the larger the NAND storage, the less likely you will reach that limit in day to day usage.

    So we have ~500x capacity increase within the next 10 years. That is roughly doubling the capacity every year.

    Today there are still many web servers using HDD. but in 2020 we will likely see even Web Servers are all SSD.

    Why does NAND have to move so fast? You may ask, they could certainly milk the industry together, but remember there is Xpoint. Those expensive, and high profitable Enterprise SSD storage wont last forever. Xpoint provides everything Enterprise want and are willing to pay for it.
    Reply
  • zodiacfml - Thursday, October 22, 2015 - link

    Not. Companies look forward into the future as far as they can and spinning drives will become a niche as tape drives did. SSDs will have more density than HDDs in the near future and price per GB will approach HDDs a few years after that. That excludes the lower power, reliability, and much higher performance. Reply
  • Wolfpup - Thursday, October 22, 2015 - link

    SSDs don't necessarily have lower power, and I'm REALLY not sure about any better reliability. Flash storage seems pretty flaky compared to mechanical disks so far... Reply
  • Wolfpup - Thursday, October 22, 2015 - link

    EDIT: That said I've not had issues with my Micron/Crucial drives nor my Intel drives like I've had with other brands of flash. Reply
  • ZeDestructor - Thursday, October 22, 2015 - link

    It seems the industry has by and large embraced SSDs around when Intel pushed out the S3700 (and S3600/S3500), judging by the somewhat recent flood of them on ebay. Partly it comes from OEMs having them in their server config setup, and partly from various testbeds left, right and center proving quite reliable. In fact, the issues in general seem to be from bad OS code (850EVO/Pro) or a bad controller . Of course, exceptions like the SF-2281 failures and 840/840EVO mar things a bit, but across the industry, especially the server space, things have been pretty quiet... Or I'm reading the wrong forums...

    At the other extreme, SSDs are absolutely miles ahead of HDDs in any sort of mobile use simply by being shockproof.. so far I've killed 2 2.5" disks, and have another 2 that are rather suspect (had some data loss, not sure if software bug or shock)

    And finally, for lower power, outside of something like an S3500 that's distinctly at the extreme high-end with 4.27W power consumption, laptop HDDs are almost universally higher power the moment they spin up, all the while having massively better performance.
    Reply
  • Michael Bay - Saturday, October 24, 2015 - link

    What exactly waqs wrong with 850evo/pro? I`m aware of 840 issues, but not 850. Reply
  • beginner99 - Thursday, October 22, 2015 - link

    > This one acts as though hard drives are (or are becoming) niche storage.

    They will sooner or later. Western Digital could to something about it or stay stubborn and go the way of Kodak.
    Reply
  • jjj - Wednesday, October 21, 2015 - link

    "Toshiba and SanDisk are lagging behind in the transition to 3D NAND"

    That's nonsense. The transitions are only about the financials. Samsung is said to have very high costs and very little 3D production while shipping only in consumer since nothing is qualified in enterprise. Tosh/Sandisk are still ramping 15nm (Sandisk said today 60% was 15nm in Q3) and ,as you say, they lead there so why spend a lot of money to transition early? Besides who else has 3D in significant volumes , who else has 48 layers? Micron is only now ramping 2D TLC lol , Sandisk is behind because they wouldn't waste money to push 3D early?
    In the controller space the software is more important than the actual chip.

    The far trickier transition is to RRAM or other new memory and it will have to be soon enough but there they got their own research and their partners, Toshiba and the new alliance with HP.
    Reply
  • jjj - Wednesday, October 21, 2015 - link

    BTW more than 2 years ago in comment here i was suggesting that WD should buy Sandisk http://www.anandtech.com/show/6943/wd-and-sandisk-... Reply

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