Toshiba Hard Drive

Toshiba Makes Strategic Partnerships In Order to Compete in Hard Disk Drives

Toshiba’s hard disk drive division has been a technology leader in new hard disk drive technology introductions due to its access to advanced magnetic head and disk technology from TDK and Showa Denko (SDK).  The recent announcement by Toshiba of two new technology centers in association with TDK and SDK gives the company the means to remain technologically competitive in the fast moving HDD industry.

While Seagate Technology and Western Digital were acquiring head and disk research and production facilities over the past two decades to achieve vertical integration of these key HDD components; Toshiba pursued a path of what it called “vertical integration” with heads from TDK and disks primarily from Showa Denko.   In addition to selling components to Toshiba, TDK has also built HDDs for the company in its partner SAE plant in China.  

As independent head and media suppliers in an increasingly consolidated market, TDK and SDK carried on research and development that allowed them to introduce advancements such as perpendicular recording in Toshiba products in 2004, many months before the other hard disk drive companies could bring their perpendicular recording products to market.

With the announced acquisition by Western Digital of Hitachi GST and Seagate’s acquisition of Samsung’s HDD division, the number of HDD suppliers by the end of 2011 will probably be three (Seagate, Western Digital and Toshiba).  In anticipation of the mergers Toshiba has been picking up market share from OEM customers who want to maintain a strong third source.  It appears like that Toshiba will end up with 15-20% of the hard disk drive market in unit shipments as a result of the Seagate and Western Digital acquisitions.

However to remain competitive, Toshiba needs a technology base with its key component suppliers.  With the opening of its HDD Advanced Technology Center (with TDK and SDK) to develop higher density recording technology and the HDD Manufacturing Technology Center (with TDK and likely its partner SAE) to develop manufacturing capabilities, on July 16, 2011, Toshiba is taking clear steps to maintain its technological relevance and ability to remain a competitor in the HDD industry. 

In a recent conversation with company representatives it appears that Toshiba is integrating its overall digital storage offerings.  It will provide its flash memory and HDD products from the same overall business unit.  This could provide further competitive advantages for Toshiba, particularly for products that might combine HDDs and flash memory to achieve better consumer experiences at lower prices than with flash memory alone.  Considering that Toshiba, Seagate and Western Digital are all in the SSD business I expect to see more interaction and joint development of HDD and flash products in future industry offerings.

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