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Seagate may make move for Micron

In a TV interview given in 2007, one of Western Digital’s executives laughed at the idea of SSD taking over in the mass market. So convinced was he that future mass storage would involve spinning disks, that he went on record to say so.
But last year’s tragic floods and constant process improvements see to be giving SSD new momentum.
Can Seagate adjust its angular velocity in time?
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Is Seagate considering a bold move into the memory market in order to secure itself a position in SSD?
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Now there’s a question.
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While the memory giant, Micron, has been working to acquire Intel’s memory operation while simultaneously wondering if it needs to maintain Crucial, Lexar and Micron branding, it has also become the subject of interest in the market.
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According to a post on industry insider blog NotSoDIMM this week, they should be.
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If there’s one thing that a KitGuru knows, it’s that stories like this will come around with some regularity. In each case, you need to consider the market forces at work before deciding to sell your house, car, kids, dog and betting it all on mergers.
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A good example would be the strong rumour last month that Seagate would buy OCZ, but nothing happened (yet?).
NotSoDIMM argues that such an acquisition would do very little for Seagate’s SSD ambitions – as it does not address the key issue – that you cannot be a player in the SSD market of the future unless you make your our NAND Flash.
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Kingston is such a heavyweight, with the ability to place such large orders, that being a manufacturer of NAND Flash itself is probably irrelevant. Sandisk has a wealth of patents etc to call on when trying to strike deals and OCZ has developed for itself the premium brand in the performance SSD space.
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But for the rest of the world. Actually being a manufacturer of the underlying memory is likely to become a crucial issue (pun partially intended).
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The PC market, which currently accounts for 50~60% of the hard drive makers volumes, has flattened out considerably and is unlikely to provide much growth again. In addition SSD has already begun to establish itself in this space and is taking share. If the present trends for increasing size, while reducing the price for SSDs, within 5 years it could be all over for the HDD in the mass market PC.
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The argument about cost per GB looks increasingly redundant in the mass market PC. Not only does SSD delivers greater speed, performance and power consumption – if you really need loads of storage, then you have shared external devices (NAS etc) and the cloud.
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Right now, Seagate exists a very powerful position – with such large volumes still being churned out and relatively few alternatives in the market, the company is cash rich and much have pondered buying almost everyone in the SSD space. NotSoDIMM reckons that it could well acquire Micron which would give them access, amongst other things, to the NAND required.
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Obviously this would be a much more expensive purchase than OCZ, but the price on Micron could well drop a little over the next 6-12 months as the SSD market becomes tighter and margins get squeezed by increased competition.
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So, basically, Seagate wants to exchange one kind of disk for another, but stay in the disk business
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KitGuru says: If Seagate did go down this road, their opportunities would open right up. For example, no one is going to be thinking about spinning hard drives into mobile phones, tablets or ultra-thin notebooks. Those exploding markets need SSD. Which means Seagate needs SSD.
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