Hitachi is reported to be considering an IPO or sale of Hitachi GST, its disk drive operation, ranked third in the industry behind Seagate and Western Digital. How much is it worth? Who would want to buy it? IPO Hitach GST had revenues of $4.8bn in 2009. We can look at the annual revenues of Seagate and Western Digital and …
..hang on a sec, something wrong here. Circular argument. Still, IBM did something similarly silly in the printer market in the 90's.
Hitachi GST are worth buying. A box of drives is just a box of drives... nothing particularly clever in that...
Worth buying unless
It's a box of drives with a frighteningly high failure rate.
Coat, taxi, etc.
Considering the growing Flash market and ...
.... generally growing solid state storage market, not least of which now also with Memristors on the horizon in 2013, I wouldn't want shares in a disk drive company let alone actually buy the company (if I had the money), but then I would be thinking longer term like next 10 years.
I think Hitachi see the spinning disks market going the way of the cassette tapes and valve technologies etc.., so they are selling up now whilst they have a few years of ok profit remaining in their company before it goes down hill. Makes sense to sell now, as some companies could buy it looking mainly to the short term profits making it a viable buy now, because it will be hard to sell it for much in 5 years from now.
Solid state storage is the future. Hitachi have to use 3rd party memory for SSD whereas in their HDD side of their business they are more self sufficient. I bet Hitachi are looking to a near future where they would be more forced to be dependent on a 3rd party supplier for memory who could squeeze them out the market easily over time in the near future. It makes sense to sell up now for them to get a better return now.
Fire Up The DeathStar
Can't see who'd want them, they've been cursed with "DeathStar" [sic] disk, a product with a phenominal failure rate.
Why NOT to buy it?
Because the SSD is coming and will soon be eating the market for HDDs, starting with the small ones and working upwards. Certainly it'll be quite a while before you can buy a Terabyte SSD for £50, but there again, do most office PCs actually need 330Gb HDs? Personally I doubt that they need more than 80Gb, even with Windows bloatware, and they get 330Gb just because a 330Gb HD costs very little more than an 80Gb HD, and is faster than a smaller HD.
I wonder whether IBM had seen this coming when they sold the business to Hitachi? In any case, that day is now a lot closer. Why pay a lot for a technology that will be in decline , probably terminal, starting two or three years from now, if SSD technology continues to advance as predicted by Moore's law.
I'd add, that there are at least two radically new solid-state storage technologies waiting in the wings to obsolete flash memory, and maybe put Moore's law applied to storage on steroids. Memristors, and something using bistable properties of Silicon dioxide films that I don't recall the name of. I very much doubt that HP are interested in HDs, they invented the Memristor technology and presumably have patents.