Seagate is fueling rumors in the NAND industry with analysts saying that
they expect Seagate to acquire a NAND source to shore up its supply of NAND
flash chips. The company is in preparation for its line of solid state drives
(SSD) that it will have to produce within the next few years.
According some analysts, the only way to be really profitable in the SSD
market is by having a secure and fixed source of NAND chips by building them
yourself or by teaming up with a company that builds NAND directly.
This is the route that Intel took for its own line of SSDs -- that are undergoing
in-house testing -- by teaming up with NAND flash maker Micron. Analyst
Daniel Amir from the firm Lazard told eWeek that Seagate
may be looking to buy out Intel’s 49% stake in the IM Flash Technologies
joint venture Intel has with Micron.
Purchasing the 49% stake from Intel would reportedly cost Seagate anywhere
from $1 billion to $2 billion. Avi Cohen from Avian Securities told eWeek,
“However, I am skeptical of an Intel-Micron breakup. First of all, Micron would
have to agree, which would mean the loss of a major partner -- Intel.”
If buying out Intel’s share of Micron isn’t an option, a purchase of SanDisk
may be the route to go according to Cohen. Cohen says that right now SanDisk is
the lowest cost source for NAND flash modules, making it a much better target for
Seagate to acquire or partner with.
Seagate announced in May that it would have its own line of SSDs
on the market next year. However, Seagate says it will
not aim its products at the retail market; rather it will aim its SSDs at
the enterprise market where the benefits of SSDs along with much larger budgets
make the technology more attractive.
Cohen says, “I think the best thing for Seagate is to buy SanDisk and call
it a day. Seagate has more expertise on the enterprise side, while SanDisk has
more exposure on the retail side. SanDisk is the lowest-cost producer of NAND.”
