Seagate-Samsung deal to spur HDD, SSD, hybrid drive development

Analysts note that once the $1.4B deal closes, all HDD vendors will also be SSD manufacturers

Seagate's proposed purchase of Samsung's hard disk drive operations will likely lead to faster development of new hard disk drive (HDD) technology and improved solid state drive (SSD) and hybrid drive output, according to industry observers.

Seagate said today that it has agreed to purchase Samsung's hard drive operations for about $1.4 billion. The deal also calls for Samsung, the world leader in NAND flash chip production, to continue supplying Seagate with flash memory technology, and for Seagate to supply HDD products for Samsung's PC, notebook and consumer electronics products.

The deal means that Seagate will be able to more easily step up development of enterprise-class SSDs and consumer-class hybrid drives, which marry mechanical hard drives with solid state technology.

The two companies also plan to expand an existing patent cross-licensing agreement and collaborate on development of enterprise storage systems. That means Seagate will be able to tightly integrate its SSDs with Samsung's NAND flash controller chip technology, according to John Rydning, research director for IDC's hard disk drive research arm,

To date, Seagate has been an industry follower when it comes to SSD technology.

The company only announced its first full enterprise-class SSD line a little more than a year ago. Seagate's current Pulsar SSD line is based on its own proprietary controller technology.

Last August, Seagate and Samsung announced an agreement for Seagate to base its SSDs on Samsung's 32 nanometer (nm) NAND flash circuit technology. For example, Seagate's refresh of the Pulsar line, the Pulsar XT.2, is based on Samsung's NAND flash.

Last year, the market for enterprise-class SSDs was around $850 million, while the market for consumer-class or client SSDs was about $1.3 billion, said IDC analyst Jeff Janukowicz. Next year, the enterprise-class SSD market is expected to grow to $1.8 billion and the consumer-class SSD business to over $2 billion.

Recent consolidation in the hard drive industry, which includes Western Digital's agreement to buy Hitachi GST, means there are only three major players left, including Toshiba.

"I think there will still be plenty of competition between the three remaining players. Ninety percent of the market will be split pretty much evenly between Western Digital and Seagate, with Toshiba playing in some niche opportunities," said John Webster, a senior partner at market research firm Evaluator Group.

Webster believes the HDD market consolidation is being driven by two converging forces; price drops in non-volatile memory used in SSDs, which offers vastly higher performance than HDD; and the fact that manufacturers believe "the mechanical disk has hit a performance wall relative to continuing gains in processor performance.

"I/O to disk is now perceived to be a drag on overall system performance. Clearly, the smaller players (Hitachi and Samsung) have opted to position themselves to ride the next wave," he added.

The marketplace consolidation is good news on two fronts, according to Rydning and other industry experts.

For one, it means more stable HDD pricing in a market that is still competitive. And, it means a boost for the development of next-generation hard drive technology, which has the potential to produce 2.5-in mobile drives with more than 1TB of capacity.

"Some of the next-generation HDD technology is pretty complex and pretty expensive. If you had five players all chasing that, it means you've got five R&D centers, and you've got five sizeable capital investments," Rydning said.

Over the next year, Seagate and other vendors will be able to ramp up development of heat-assisted magnetic recording (HAMR) and bit-patterned recording technologies.

Bit patterned recoding, announced by Toshiba last year, breaks up the recording surface into numerous magnetic bits, each consisting of a few magnetic grains, onto which a bit of data can be stored.

HAMR uses a laser to pre-heat a platinum alloy as a material onto which bits of data can be recorded. The technology allows smaller bits of data to be written closer together without causing the superparamagnetic effect, which simply means that as two magnetically-charged nanoparticles are placed in close proximity, they have a tendency to randomly flip direction causing data corruption.

"There are products that will be announced over the next 12 months," Rydning said. "It's a long runway to develop those technologies and bring them to market."

On the client side, Seagate's only offering has been a hybrid drive, or an HDD that includes a small amount of NAND flash with a controller. The hybrid drive aims to provide improved performance without the high cost of pure a SSD.

Seagate's first attempt at selling hybrid drives failed to gain market adoption.

Last spring, the company launched its second attempt at a hybrid drive, the Momentus XT. The device is priced at $113 for a 250GB model. That drive ran into some performance problems that Seagate said it has fixed.

"I would say ... Seagate's strategy is for both its hybrid HDD and SSD. It will drive significant consumption of NAND by Seagate over the next several years, so the supply agreement will be a huge benefit for Seagate," Janukowicz said.

Rydning believes the three players left in the business will also ramp up production of SSDs and hybrid drives, even though system manufacturers have been reluctant to include the technology in laptop and desktop computers.

"Only a few PC [manufacturers] are offering SSDs and in most cases it's only an upgrade and not a standard feature. But all the HDD companies are now also SDD companies." he said. "A year from now, we do expect to see more suppliers of hybrid drives."

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags IT industryIDCstoragestorage hardware

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Lucas Mearian

Computerworld (US)
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?