Western Digital Corp.’s newly designated headquarters in San Jose reflects the growing influence and importance of the company’s two priciest buys in its 57-year history.
The $4.8 billion deal in 2012 for San Jose-based Hitachi Global Storage Technologies Ltd. set a foundation for growth opportunities in the server and data center market while propelling the company to the leadership position in hard drive unit sales and revenue, a title it hasn’t relinquished since.
The buy diversified product offerings into the corporate sector and cloud as it distanced the company from a long-held reliance on the gradually declining PC market. A majority of its $13 billion in annual sales is now generated from non-PC business lines, a significant shift that took place only in the past few years.
Hitachi Global, renamed HGST after the sale, is where Chief Executive Steve Milligan impressed his predecessor, John Coyne, who took home Business Journal Business Person of the Year honors in his last year at the helm after completing the acquisition and overseeing recovery efforts following floods that crippled key operations in Thailand for months.
Milligan’s tenure at HGST, which began in 2007 as chief financial officer before he replaced Coyne in the top post, was lauded on Wall Street for reshaping an unprofitable, mismanaged unit of Japanese parent Hitachi Ltd. into a thriving global competitor and spinoff candidate.
Tech History
Western Digital’s new home at 5601 Great Oaks Parkway is HGST’s former San Jose operations headquarters, where a 390,000-square-foot expansion last year took it up to 3.2 million square feet.
The campus is one of the last legacy manufacturing hubs in Silicon Valley. It was established in 1956 and is considered the birthplace of hard drive development. The first storage unit was introduced there in 1964 and featured a removable disk, a revolutionary technology that eventually ended the era of punched cards.
Into the Future
The facility has more recently become a leading developer in one of the most advanced products reshaping the industry.
HGST took more than a decade and more than $100 million in research and development to develop the innovative, sealed helium-filled drives, now in their third generation. It’s sold more than 10 million HelioSeal-branded drives since their debut in late 2013 to an impressive roster of clients, such as Netflix, Hewlett-Packard, Huawei and some of the biggest social media and search companies.
Western Digital’s record $17 billion acquisition of Milpitas-based SanDisk Corp. about a year ago created the most diversified storage products maker in the world.
The buy more than doubled the company’s market opportunities to $76 billion while boosting higher-margin business lines in solid-state drives—which use chips instead of spinning disks to store and transfer data—and the booming data analytics, digital video, cloud computing and data center storage segments.
SanDisk’s memory card products are carried in Best Buy, Wal-Mart, Fry’s Electronics and big online retailers, such as Amazon and Newegg.
“I really believe the SanDisk acquisition is seminal to the company thriving in the future,” Western Digital General Counsel, Chief Legal Officer and Secretary Michael Ray told the Business Journal in November.
