Seagate Going to China?
The stock market was alive with rumors that Seagate might be bought by an unnamed Chinese company, as reported in the New York Times, among others. This comes after a week of insider whispers about a possible tieup between Seagate and memory-makers, Micron or SanDisk, itself a Seagate spin-off. It seems that the hot disk drive and flash memory markets are shaking as sales heat up and margins thin out. Note that this is far from a done-deal. Rather, Seagate CEO, William Watkins, was merely noting in an interview that there was such an inquiry.
To my eyes, a Seagate buy-out would be little different from the sale of IBM’s disk drive operations to Hitachi back in 2002 or their sale of the PC group to Lenovo two years later. Seagate is a component maker, and although it is a critical piece of the storage industry it is not really a strategic entity. Certainly, the company’s contributions to standards like SATA, SAS, and (yes) hybrid drives are worthwhile, but apart from evault, the company contributes little to the value-added services landscape.
Still, if a buy-out softened scrappy Seagate I would miss the healthy contribution between them, Western Digital, Hitachi, and the other disk vendors. And it would be an end of an era, with Alan Shugart’s old company going the way of MG Rover and the rest.
