Western Digital announced today that they have entered in to an agreement to acquire SanDisk for approximately $19 billion. Western Digital is one of the few remaining hard drive manufacturers, but their only presence in the solid state storage market has been the enterprise SSDs sold by subsidiary HGST. SanDisk's joint venture with Toshiba on the other hand - one of the four major manufacturers of NAND flash - allows SanDisk to develop a wide range of solid state storage products. This acquisition will give Western Digital some much-needed diversification and potential for growth as hard drives are becoming a niche storage medium.

Without a major SSD-related acquisition, Western Digital would have faced diminishing relevance or the daunting task of carving out a significant piece of the highly competitive SSD market. Over the past several years the solid state storage industry has seen a lot of consolidation, leaving Western Digital with few options for acquisition, of which SanDisk was the largest they could afford.

However even with the acquisition Western Digital won't enjoy the same status in the SSD market that they have had in hard drives. Toshiba and SanDisk are lagging behind in the transition to 3D NAND, having only just started installing manufacturing equipment in their new fab that is intended to start production in the first quarter of 2016, a year and a half after Samsung's 3D NAND drives hit the shelves. SanDisk has also not established a large presence in the mainstream SSD controller space, relying on third-party controllers while their competitors have been striving for more vertical integration. SanDisk's 15nm NAND will probably go down in history as the most advanced planar NAND process but they're running out of time for it to make a significant impact on the market.

Western Digital expects the deal to be closed in the third quarter of 2016. The acquisition will give their future more security, but they'll still have to work hard to stay a major player in the long run.

Source: Western Digital

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  • MadHatter0 - Wednesday, October 21, 2015 - link

    Here's hoping the quality and warranty on Sandisk under it's new owner holds up!
  • bigboxes - Friday, October 23, 2015 - link

    Me too. I have too much invested in SanDisk. I guess we all hope that WD doesn't mess up a good thing. Smart move by WD. I'm not sure I want one's success to depend on the other.
  • vmll - Wednesday, October 21, 2015 - link

    I don't like the over-dramatization I've seen in some of the AnandTech articles lately. This one acts as though hard drives are (or are becoming) niche storage. Hard drives are far from niche. Though they may be mostly removed from consumer computers within the next few years, hard drives will continue to have a very healthy market in the enterprise storage space (which is massive). Consumers will still be using them in the form of backup/external storage as well.
  • jjj - Wednesday, October 21, 2015 - link

    Enterprise would be niche and even worse their ASP in enterprise will decline too.. Anyway, you don't know the size of that market.
    WD actually provides non-PC revenue and you can do the math and approximate enterprise. In Q2 enterprise was 15% of their units( 7.2 million out of 48.5 - they provide those numbers) and enterprise revenue was likely some 1.15 billions so some 36% of revenue. Even factoring in some variations and accepting a 35-40% of revenue range ,that not that much. Losing scale , by losing all other segments almost entirely would have a huge impact on costs and they would be in far more trouble than you imagine. Being the new tape isn't a great business.
  • Kutark - Wednesday, October 21, 2015 - link

    Honestly... they kind of are. IMO 2-3 years SSD's prices should be down close enough to HDD as far as price/gb as to be irrelevant. Right now the biggest complaint i encounter in my various forums is that people want more space for their games. Basically a lot of people have slow internet, or caps on their internet, and like to keep 40 or 50 games installed at a time so they dont have to redownload it, etc, if they decide to play it.

    Personally i think they're being ridiculous. I have this argument regularly with my best friend who still hasn't bought an SSD because he maintains that he needs to keep all these games installed, yet when i look at his steam profile, many of them he literally hasn't played 1 min in 1-2 years or longer.

    However, to get back to my point, once you can get a 512gb SSD for $100 or so or less, i personally (and this is just my anecdotal opinion) think that the average gamer will switch over. Right now gamers occupy this weird middle ground in storage needs. The average user, i.e. web surfer, email, youtuber, etc, doesn't need multiple TB of storage, and if they do they typically use portable mediums such as external HDDs. People who really do need a ton of space (video editors, photo editors, other professionals, etc) will be the main source of people who need high capacity HDD's that aren't *as* concerned about performance of the drive.

    So, in my humble opinion, once you convert gamers over to SSD primarily, you will have basically reduced the HDD market to professionals, and things like NAS/SAN/etc.
  • dsumanik - Wednesday, October 21, 2015 - link

    i disagree flipping point will be, 1tb for 100 or less.
  • Wolfpup - Thursday, October 22, 2015 - link

    I like having both. Like my main notebook I've got a 500GB Micron SSD + 750GB 7200RPM mechanical drive. I bought a 1TB SSD for my newer though lower end system, but still, I like having the OS and whatnot on an SSD for faster boot times, and I keep my media including games on my mechanical drive.
  • DanNeely - Thursday, October 22, 2015 - link

    Outside of the enthusiast market, I think you're being overly optimistic. $400 race to the bottom laptops sell in much larger volumes than anything else. As long as they can save $0.01 by using an HDD over an SSD they will.

    You're also IMO underestimating the value of bigger bogo-stats to non-technical buyers. Latency/random IO rate/IOPS are completely meaningless to most people. 1000 GB means I can store more than 8 times as much stuff at 120 GB is something that they can intuitively understand and "know" that the big HDD is better than the small SSD. Besides 120GB would be worse than the 320GB in their last laptop, and you can't buy a new laptop that's worse than what you're replacing. (Even though 99% of them won't actually use any of the extra space).

    Unless cheap ultrabooks kill off cheap conventional thickness worstbuy specials, HDDs will continue to dominate consumer sales until the sticker price per GB is lower for SSDs; which probably won't be for a number of years. (The articles claiming the SSD cost/GB will cross over the HDD one for bulk storage in the next year or two are looking at TCO for datacenter use, where savings in power use and server density are much more important than the upfront price that dominates cheap laptop specs.)
  • Kutark - Friday, October 23, 2015 - link

    You make excellent points
  • xype - Monday, October 26, 2015 - link

    The question is, though, whether any company really wants to be in or bet on the low end market segment product lines. WD would have to sell a shit load of drives in $400 laptops in order to make any kind of significant profit. So unless the profit margins on big HDDs are larger than they are on SSDs, HDDs are going to go out of style (especially with more and more storage needs being covered by various cloud services). Perhaps not in 2-3 years, but WD has to think 5+ years, and that’s a realistic timeframe for their HDD business to become a niche venture.

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