Western Digital Swallows Komag
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In a move that all the big fish are doing lately, big fish Western Digital purchased Komag, a supplier of the media that Western Digital uses to make its disk drive systems.
The purchase price was 1 billion dollars, and allows Western Digital to compete more effectively with industry giant Seagate, that had recently swallowed up Maxtor. With the loss of the distinct company of Maxtor, the number of drive manufacturers drops by one, and in reality, means that only 2 big players are left. Seagate and W-D have the bulk of the industry, with Hitachi, Fujitsu, and Samsung much smaller fish in the global pond.
While not expected to close until later this year, both boards gave unanimously voted for the deal, so no problems should impede sale completion.
As smaller numbers of manufacturers are available for supply, it becomes more important that each company controls the manufacture of the product from end to end. Also important is no markups from component to complete product, as the retail price of drives keeps dropping again this year, with previously huge drives available at truly stingy prices.
All of this is good news for the consumer as long as the ‘pond’ still has a few fish to spark the competition.
Tags: western digital, komag, seagate, maxtor, hitachi, samsung, fujitsu