Hitachi launches new hard disk firm with IBM

Japanese electronics giant Hitachi said Monday it has launched a company combining its hard disk drive (HDD) operations with those of US counterpart IBM to boost global competitiveness.

Hitachi Global Storage Technologies is owned 70% by Hitachi Ltd. and 30% by IBM Corp., but the Japanese firm will take full control of the business—headquartered in San Jose, California—at the end of 2005.

“One of Hitachi’s overarching goals is to leverage its competitive edge in HDDs to exercise leadership in the IT (information technology) industry by building the infrastructure needed to support a ubiquitous information society,” the firm said

in a statement. The deal finalises an agreement reached in June when Hitachi announced it would take over IBM’s HDD business for $2,05 billion.

The new HDD company will bring together some 21 500 employees—about 14 700 from the world’s biggest computer maker and 6 800 from Hitachi—with manufacturing operations at 15 locations globally and sales outlets in 13.

Analysts have said the deal has potential benefits for Hitachi while allowing IBM to focus more on computer services rather than hardware.

Hitachi Global Storage Technologies officially began operations on January 1, merging Hitachi’s research and development capabilities with IBM’s technology expertise, the firm said.

The Nihon Keizai Shimbun newspaper reported earlier that Hitachi recorded about 100-billion yen ($837 million) in sales of HDD-related products in the year to March 2002, placing it ninth in the world, while IBM—which was ranked third—posted sales of 400-billion yen.

The new venture aimed to be the world’s leading HDD company in the year to March 2007, with annual sales of seven billion dollars, the financial daily said.
- Sapa-AFP

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