Fujitsu and Toshiba Agree on HDD Business Transfer

(Top News, 23 Feb 2009)

Fujitsu Limited and Toshiba Corp. has announced that they have signed a memorandum of understanding (MOU) on the transfer of Fujitsu’s hard disk drive (HDD) business to Toshiba. The companies plan to
conclude a transfer contract at an early date, and aim to complete the transaction in the first quarter of fiscal 2009.

Fujitsu will facilitate the transfer by bringing its HDD-related businesses and functions together in a new company. Toshiba will acquire about an 80 percent stake in this company and make it a Toshiba Group subsidiary. In order to promote a smooth transfer, Fujitsu will continue to hold a stake of under 20 percent in the new company for a certain period of time, after which it will become a wholly owned subsidiary of Toshiba.

The consolidation of the two companies’ HDD businesses will enable Toshiba to reinforce its already strong position as a leading vendor of small form factor HDDs (2.5-inch and smaller HDDs), widely used in notebook PCs, mobile devices, automotive and consumer electronics. It will also give Toshiba entry into the enterprise HDD market for server and data storage system applications, where Fujitsu is currently a leader. Toshiba aims to build its position in the enterprise market to meet expected growth in demand for data storage systems.

Entry into the enterprise business will allow Toshiba to further enlarge its market-leading solid state drive (SSD) business by developing SSD products for servers and enterprise storage systems, fusing Toshiba’s NAND flash memory technology with Fujitsu’s enterprise HDD technology. This move is expected to spur expansion of the rapidly expanding SSD market.

By taking advantage of the integration of Fujitsu’s HDD businesses, Toshiba also aims to strengthen collaboration with HDD parts suppliers and to promote cost reductions and the development of new technologies.