Lake Forest-based Western Digital Corp. is reported to be in talks to buy the disk drive business of Japan’s Fujitsu Ltd.
Reports from Japanese newspapers and Reuters say a deal could be worth $662 million to $945 million. Other companies are said to be talking to Fujitsu.
If a deal comes about, it would double Western Digital’s market share in 2.5-inch drives used in laptops to about 30%.
That would put Western Digital ahead of archrival Seagate Technology LLC in 2.5-inch drives.
Seagate, the No. 1 maker of drives, and No. 2 Western Digital control about 60% of the total market for drives used in computers and consumer electronics.
Fujitsu has struggled to compete as the industry’s boom of the past few years gives way to lessened demand and a buildup of unsold drives.
The company’s drive business lost about $50 million in the 12 months through March.
A Fujitsu representative denied media reports of sale talks.
Japan’s Nikkei business daily quoted an unnamed source saying Fujitsu wants to sell the business by year’s end.
Fujitsu is looking to sell its drive business to focus on technology consulting services, where it competes with IBM Corp. and Electronic Data Systems Corp.
The company left the cutthroat market for PC drives in 2001 to focus on drives for laptops and servers.
In 2002, Western Digital bought a Thailand drive plant from Fujitsu.
A deal would be Western Digital’s second big buy in as many years.
In 2007, the company paid $1 billion for San Jose-based Komag Inc., which makes thin-film metal disks that store data within disk drives.
Less demand, a buildup of unsold drives and fears about falling prices have curbed Western Digital’s stock, which is down about 30% for the year so far with a market value of about $4.5 billion.
The company’s shares saw big gains from 2005 to 2007 as it grew amid stable conditions in the notoriously volatile business.
