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Seagate Buying Samsung Drive Unit To Compete With Western Digital

Irvine-based disk drive maker Western Digital Corp.’s pending $4.3 billion buy of Hitachi Global Storage Technologies Ltd. has prompted archrival Seagate Technologies LLC of Northern California to strike a deal of its own.

Seagate said Tuesday it is paying $1.4 billion for Samsung Electronics Co.’s disk drive business.

The move confirmed speculation of a deal that surfaced in the past two days.

The deal also gives Seagate access to Samsung flash memory chips used in solid state drives that use chips instead of spinning disks to store data.

The move is seen as a response to Western Digital’s pending buy of Hitachi, which is set to close in the third quarter.

Western Digital now ships more drives than Seagate but trails in revenue with Seagate’s focus on more costly drives for corporate computers.

It’s set to be the undisputed leader in drives once Hitachi is acquired.

A buy of Samsung’s drive unit isn’t as big. Hitachi now is the No. 3 maker of drives with about 18% of the market.

Samsung is No. 5 with about 10% market share.

With Samsung, Seagate would have about 40% of the market, versus 49% for Western Digital with Hitachi.

But the buy is seen as helping Seagate compete with Western Digital in a consolidating market.

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