Purchase cost Western Digital $65 million to complete

The solid-state drive (SSD) market is growing as more enterprise customers see the advantages of the power savings that the drives offer. SSDs are also offered in many laptop and netbook computers currently on the market, but in the consumer realm, the traditional hard drive is still tops when it comes to storage.

Hard drive maker Western Digital has announced that its acquisition of SSD manufacturer SiliconSystems has been completed. The acquisition cost Western Digital $65 million in cash. SiliconSystems is a leading supplier of SSDs for the embedded systems market.

According to Western Digital, the SSD market is worth about $1.1 billion today and embedded systems is the biggest category in the segment with about $400 million in sales. The purchase will allow Western Digital, best known for its consumer products like the recently announced My Book World Edition external hard drive, to enter into the lucrative embedded SSD market.

The product portfolio of SiliconSystems includes SSDs using SATA, EIDE, PC Card, USB, and CF interfaces in 2.5-inch, 1.8-inch, CF, and other form factors. The purchase also gets Western Digital an extensive IP library owned by SiliconSystems that relate to systems that ensure data integrity, eliminate unscheduled downtime, and protect application data/software.

Western Digital president and CEO John Coyne said in a statement, "We are delighted to have the SiliconSystems team join WD. The combination will be modestly accretive to revenue and margins as a result of SiliconSystems' existing position as a trusted supplier to the well-established $400 million market for embedded solid-state drives. SiliconSystems' intellectual property and technical expertise will significantly accelerate WD's solid-state drive development programs for the netbook, client and enterprise markets, providing greater choice for our customers to satisfy all their storage requirements."

Western Digital reports that the integration of SiliconSystems will begin immediately and that the company will now be known as Western Digital Solid-State Storage business unit.

Founder and CEO of SiliconSystems Michael Hajeck said in a statement, "WD's strong balance sheet, sales reach, and operations and logistics capabilities will allow us to greatly accelerate our penetration of our existing markets, while combining our engineering expertise with WD will enable us to develop new solid-state drives to broaden our overall product portfolio and address the emerging applications for solid-state storage in WD's existing customer base. We are extremely excited to be joining WD and enabling an even stronger future for our talented team."

Hajeck will now become the senior VP and general manager of Western Digital's Solid-State Storage business unit.

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