Western Digital Announces Acquisition Of SanDisk

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Western Digital Corporation and SanDisk Corporation today announced that they have entered into a definitive agreement under which Western Digital will acquire all of the outstanding shares of SanDisk for a combination of cash and stock. The offer values SanDisk common stock at $86.50 per share or a total equity value of approximately $19 billion, using a five-day volume weighted average price ending on October 20, 2015 of $79.60 per share of Western Digital common stock. If the previously announced investment in Western Digital by Unisplendour Corporation Limited closes prior to this acquisition, Western Digital will pay $85.10 per share in cash and 0.0176 shares of Western Digital common stock per share of SanDisk common stock; and if the Unisplendour transaction has not closed or has been terminated, $67.50 in cash and 0.2387 shares of Western Digital common stock per share of SanDisk common stock. The transaction has been approved by the boards of directors of both companies.
 
Are we going to get Black, Red, Purple, Blue, and Green SSD's now?
 
Brahmzy said:
Ugh. And the acquisitions continue...
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Mergers are good for business (and in some ways good for consumers) ... they will always continue up to the point where Anti-trust considerations comes into play
 
At least they realize the traditional HDD has a rough road ahead. SSD's will take over at some point. You can get 1TB SanDisk SSD's for $255 on occasion.
 
Prolly the best move WD can make at this point instead of developing all that SSD stuff themselves. Taking a shortcut to get into the market is a smart idea. It would have been lame-cakes for Micron to get them instead.
 
Why did Western Digital never start developing SSD's anyways? Is it simply a matter of not having fabs or their current technology not being directly applicable to SSD's as it were?

Or maybe this was simply the better and cheaper alternative in the long run. SanDisk does seem to make pretty good stuff, but they could certainly benefit from Western Digital's Enterprise rigor.
 
Kwaz said:
Why did Western Digital never start developing SSD's anyways? Is it simply a matter of not having fabs or their current technology not being directly applicable to SSD's as it were?
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They don't make chips (aside from their disk controllers). The science of packing more bits into rust is very different from packing more bits into silicon, along with the completely different I/O mechanism.

There's just no way to make the transition overnight. And they drastically underestimated how quickly flash would increase in density.

I mean, even Intel was caught by surprise. They switched from NOR to NAND in 2006 (fairly late), and they poured money to make it a quick ramp-up. Still it still took them 3 to 4 years to build a powerful SSD at a reasonable price. And they at least had the advantage of having over a decade of previous NOR flash experience, whereas WD would start from scratch.

So, WD could either develop their own flash and always be a few years behind, or they could buy a good company and get right into the fray.
 
Is Sandisk that good? I'm a big fan of WD hard drives, and I'd like their flash division to be equally reliable.
 
Industry maturity usually equals less real choice for consumers and more artificial product line names.
 
DocSavage said:
Is Sandisk that good? I'm a big fan of WD hard drives, and I'd like their flash division to be equally reliable.
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Not as good as Samsung, Intel or Micron, but a top tier-2 maker.

And WD brings more cash to the party, allowing them to invest in better flash tech.
 
Kwaz said:
Why did Western Digital never start developing SSD's anyways? Is it simply a matter of not having fabs or their current technology not being directly applicable to SSD's as it were?

Or maybe this was simply the better and cheaper alternative in the long run. SanDisk does seem to make pretty good stuff, but they could certainly benefit from Western Digital's Enterprise rigor.
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WD makes the Black2 drive, which was an obvious attempt to keep their spindle drive segment relevant. They should have resisted that route and just gone right to making competitive straight SSDs, because they have ample global name recognition to bury their competitors in the solid state data storage segment. But instead, now they have to buy a company and lap their opponents a few times... just to catch up.
 
DocSavage said:
Is Sandisk that good? I'm a big fan of WD hard drives, and I'd like their flash division to be equally reliable.
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The latest SSD I bought was Sandisk... Came with a ten year warranty, now I'm wondering if they're gonna lose my registration information....
 
DejaWiz said:
WD makes the Black2 drive, which was an obvious attempt to keep their spindle drive segment relevant. They should have resisted that route and just gone right to making competitive straight SSDs, because they have ample global name recognition to bury their competitors in the solid state data storage segment. But instead, now they have to buy a company and lap their opponents a few times... just to catch up.
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Because selling whatever the fuck flash they could lay their hands on worked so well for OCZ!

You know why Samsung, Intel and and Micron are the top SSD makers? It's because they have some direct control over the quality of their flash supply.

The controller is important, but NOTHING trumps the quality of the flash. If the memory sucks, there's nothing you can do. Reliability and performance will vary from one batch to another!

WD saw OCZ's momentous rise and fall on the backs of unreliable flash supply, and they decided (correctly) to look for a flash memory maker of their own.
 
defaultluser said:
Because selling whatever the fuck flash they could lay their hands on worked so well for OCZ!

You know why Samsung, Intel and and Micron are the top SSD makers? It's because they have some direct control over the quality of their flash supply.

The controller is important, but NOTHING trumps the quality of the flash. If the memory sucks, there's nothing you can do. Reliability and performance will vary from one batch to another!

WD saw OCZ's momentous rise and fall on the backs of unreliable flash supply, and they decided (correctly) to look for a flash memory maker of their own.
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Hence, why I said "competitive".
 
DejaWiz said:
Hence, why I said "competitive".
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And that's exactly what I meant in my post.

WD already has their own line of Enterprise-focused SSDs:

https://www.hgst.com/products/solid-state-drives

Those are easy to source because the volume is tiny, and the margins are high. They can buy flash in small quantities and spend extra money validating the chips.

But when you're an SSD maker with over 10% of the market, you've either got to have your own supply, or you've got to know how to work the market: you balance quality control with purchase price, and anticipate supply availability. Only Kingston has managed to handle the stress of that position without cratering:

http://www.storagenewsletter.com/ru...research/small-growth-in-1q15-for-ssd-market/

OCZ showed what happens to a new OEM who doesn't understand such things. Much like WD would have been if they made a serious effort to release their own mass-market SSDs.

I think they should have made this purchase years back, but I think it was better than scratching out a place in the market as a fabless SSD maker.
 
defaultluser said:
*** snip ***
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Ah, I understand what you mean now. :)


And after letting that sink in, you are right - it probably would have been a snowball's chance in hell for WD to grab a profit-sustaining share of the consumer SSD market as a fabless manufacturer having to source flash as cheaply as possible from any source.


Since their profits rose substantially from 2011 ($1.79B) to 2014-14 ($4.36B for each), they did slip a smidgeon for 2014 ($4.22B). Still not nearly enough to dump into their own fab and then take on further expenses for R&D, maintenance, upgrades, and operations...especially for a market that is pretty diluted with a diversity of brands/models/capacities at this point...
 
Knowing what we know now, this article is very interesting to read again:

"During its last earnings call on January 21 SanDisk explained that the company had lost business at a key customer and would need a couple of quarters to recover from this loss. SanDisk had been an important supplier to Apple, and Apple accounted for 19% of SanDisk’s 2014 revenues according to SanDisk’s SEC Form 10K. Perhaps aggressive price drops by Toshiba and Samsung caused SanDisk to lose a big part of its Apple business."

Also worth remembering from that article is that Samsung and Toshiba cut off Seagate from their NAND supplies (we know why now) and Seagate is now having to source from Micron.

It is becoming increasingly clear that Seagate needs to build or acquire its own NAND factories. It's probably far, far too late to build their own (they should have done that in 2012 instead of sticking their head in the sand), but who can they acquire now that WD has just cut them off from SanDIsk?

Another article from February described four integrated foundry-to-SSD-and-beyond groupings and suppliers: HGST/Intel, Samsung, Sandisk and Seagate/Micron. Sandisk is now WD/Sandisk. I wonder what this implies for the HGST/Intel sourcing, since HGST is owned by WD.
 
evilsofa said:
Perhaps aggressive price drops by Toshiba and Samsung caused SanDisk to lose a big part of its Apple business.
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This line doesn't make complete sense to me. Toshiba and SanDisk have been NAND partners for some time...


WDC + SNDK is far less exciting than the LRCX + KLAC merger. Going to get some pretty cool process improvements out of that one ;).
 
In my particular field, this is going to make things tough. We use SanDisk eMMC, (Q)SPI, and SD cards with a lot of our chips. SanDisk was *already* tough enough to work with in terms of getting datasheets. Now, it will be virtually impossible with W.D. as the overlords (if they don't kill them altogether).

This is about much more than SSDs. SanDisk's SSD business is *minuscule* compared to their business in embedded flash devices.
 
They probably would have liked to buy Micron instead but their value is most likely out of WD's price range.

Least Sandisk will remain in US hands.
 
Good on WD but I still think its really telling that they needed to acquire someone else to get into SSDs.
The writing was on the wall in the early 2000s that SSD was the way to go. Whomever plans their future decisions clearly isn't on the ball.
 
Brahmzy said:
Ugh. And the acquisitions continue...
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Has to happen. Storage is a tough business and neither of these companies was turning in stellar results. From what I heard, it sounds like they want to be able to complete with Intel on this front.

Besides, it's not as if we're losing a player. WD is mostly Platters and Sandisk is flash.
 
sliverjazz said:
So the company with the osbolete tech buys the other company? ok...?
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Mechanical drives are far from obsolete. SSD's still cost several times the price per GB, especially with server level drives.

I've purchased almost 50TB of WD drives in the past month to upgrade a couple servers in my office.

Maybe in a few more years the prices will get closer, and maybe SanDisk will start shipping the 4TB and 8TB drives they've been talking about. Hopefully they eventually will have server level drives for a reasonable price.
 
Hopefully they won't be as shitty as Micron/Crucial. And hopefully they include better "software" than Acronis. Crucial and Acronis can go fuck each others assholes. Never had an issue with my WD drives, but Crucial is such a nightmare. Probably going to return it and buy something better. Maybe they'll include real software to.
 
mi7chy said:
Marriage of crappy hard drives and flash storage.
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You referring to Seagate or maybe Toshiba and OCZ :)

You couldn't be talking about WD as their drives are currently among the best.
 
evilsofa said:
It is becoming increasingly clear that Seagate needs to build or acquire its own NAND factories. It's probably far, far too late to build their own (they should have done that in 2012 instead of sticking their head in the sand), but who can they acquire now that WD has just cut them off from SanDIsk?
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Seagate signed a pretty comprehensive supply agreement with Micron, so they are probably set until that runs out. If they wanted, they could possibly make a run at Toshiba but that is a pretty big diversified company. Plus Toshiba and Sandisk are pretty much joined at the hip anyways and that would get fairly awkward.

Another article from February described four integrated foundry-to-SSD-and-beyond groupings and suppliers: HGST/Intel, Samsung, Sandisk and Seagate/Micron. Sandisk is now WD/Sandisk. I wonder what this implies for the HGST/Intel sourcing, since HGST is owned by WD.
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WD has pretty much let HGST run completely independent focus on the enterprise space. Though there is a lot of overlap between the HGST and Sandisk in the enterprise space which will be interesting to see them sort through. I would assume that HGST will still work with Intel at least on XPoint products.
 
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