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Toshiba to acquire Western Digital's 3.5-inch HDD manufacturing equipment

Western Digital and Toshiba enter a deal in which Toshiba will take over WD's 3.5-inch HDD manufacturing equipment and intellectual property and WD will acquire Toshiba's 2.5-inch hard-drive facility in Thailand.

Hitachi Global Storage Technologies and Western Digital (WD) announced today a mutual and definitive agreement of property divesting between the two.

Under the agreement, Toshiba will acquire from WD manufacturing and related intellectual property for 3.5-inch hard drives (HDDs), used in desktop PCs and consumer applications, and near-line HDDs for server applications. Near-line storage is a type of data storage supporting larger capacity and with higher reliability than HDDs for desktop PC applications.

"The purchase of part of Western Digital's 3.5-inch HDD manufacturing equipment and with it the capability to produce 3.5-inch HDDs for desktop PCs, DVR and other consumer applications will expand Toshiba's portfolio and enable the company to supply products covering all segments of the HDD market," Toshiba said in a statement.

In return, WD will acquire Toshiba Storage Device Co., Ltd. (TSDT)--Toshiba's wholly owned HDD manufacturing subsidiary located in Thailand--including the principal assets of TSDT, its Thailand property, facilities, and employees.

TSDT was first established in late 2009 with the capital of 1 billion baht (about $33 million), to primarily manufacture 2.5-inch (laptop) HDDs. TSDT was temporarily closed due to the recent flood in Thailand and has not resumed operation since.

This deal is still in progress pending regulatory approval but the two companies expect the transactions to be finalized by the end of March.