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WD Reaches Agreement With Toshiba Corporation to Divest Certain 3.5-inch HDD Assets

Western Digital Corp. (NYSE: WDC) today reported that it has reached an agreement with Toshiba Corporation to divest certain assets to address the requirements of regulatory agencies that have conditionally approved or are continuing to review the company's planned acquisition of Hitachi Global Storage Technologies (HGST). The asset package covered by the agreement will enable Toshiba to manufacture and sell 3.5-inch hard drives for the desktop and consumer electronics markets and will enhance its ability to manufacture and sell 3.5-inch hard drives for near-line (business critical) applications. The divestiture transaction is subject to review by regulatory agencies in certain jurisdictions.

WD also reported that it has agreed, subject to completion of the divestiture transaction, to purchase Toshiba Storage Device (Thailand) Company Limited (TSDT). TSDT manufactured hard drives but has not resumed operations after the recent Thailand flooding. The principal assets of TSDT are its Thailand property, facilities and employees. Subject to completion of the transaction, WD plans to integrate these facilities and employees into its Thailand operations. The financial terms of the two agreements were not disclosed.

HDD Vendors Want Long-Term Contracts with PC Makers

Well, it seems that the flooding in Thailand has done a lot more than destroy lives, wreck a few factories and cause HDD prices to shoot up. There appears to be a lot of opportunities for changing the terms of business too - to less favourable ones for customers of hard disc drives. First, we had the severe and unwelcome warranty reductions and now we have HDD manufacturers trying to lock branded PC makers into expensive long-term contracts, according to Digitimes. Some PC makers buy hard disk drives on a quarterly basis, at a fixed price, but now that prices have shot up and supplies restricted, HDD manufacturers are trying to coerce them into signing one year contracts at current high prices. However, it looks like it might not be such a good deal for PC makers, because the recovery in supply is continuing, with a full recovery potentially not so far away, which will of course make those prices plummet again. As it is, HDD shipments are projected to be around 140 million units in the first quarter of 2012, while the same quarter last year was 170-180 million units - so the fall isn't really that hugely less than before anyway and should become less severe as 2012 wears on.

One does get the impression that the HDD manufacturers are playing up the difficulty of restoring production volumes in order to give them a better bargaining hand. There's also the fact that recovering from the disaster is hugely expensive for them, so HDD makers will want to charge more to recoup those costs faster, motivating them to use tactics like these.

Christmas Special: The PC Technology of 2011

Welcome to the TechPowerUp 2011 PC technology Christmas special. We hope that you will enjoy reading it while tucking into your turkey, Christmas presents and a little too much wine... In this article, we go through the technology of 2011 that has had the most significance, the most impact and was generally the most talked about. It's not necessarily the best tech of 2011 which is the most significant though, since lemons can be just as significant as the ground-breakers in how they fail to deliver - and the backlash that goes with it.

January: Intel Sandy Bridge i5 & i7

Released on January 9th, the new Intel Core i5 & i7 processors were based on Intel's second generation Core architecture built on a 32 nm production process (HEXUS review). They included an IGP (Integrated Graphics Processor) physically on the same piece of silicon along with HyperThreading. These new dual and quad core processors soundly beat all previous generations of Intel processors in terms of processing performance, heat, power use, features and left AMD in the dust. Therefore, Intel badly needed some competition from AMD and unless you have been living under a rock, you will know how that turned out in October with the launch of Bulldozer. Sandy Bridge was a sound win and is generally considered to be the only architecture worth considering at this point. The i5-2500K is currently at the sweet spot of price/performance. It comes at a stock speed of 3.3 GHz, but typically overclocks to an amazing 4.5 - 5 GHz with a decent air cooler and without too much difficulty in getting there. Models in the budget i3 range were released at various times later. See this Wikipedia article for details.

WD Slashes HDD Warranties By A Third – But You Can Buy Them Back

Way back in 2008, we reported that Seagate was lowering warranties of its hard disk drives from 5 years to 3. This trend quickly spread throughout the HDD industry and unsurprisingly, wasn't something that customers were too happy about. Now, Western Digital is lowering the warranty on some of its HDD lines from 3 years to a mere 2, with the affected lines being the Caviar Blue, Caviar Green and Scorpio Blue. Lines not affected are the Caviar Black, Scorpio Black, A/V drives and externals. Also, as the stock feeds through the channel, there will be a transition period where the same model in a store will have either a 2 or 3 year warranty, depending on its serial number, which can be checked on WD's support site. It will be interesting to see if retailers will clearly differentiate to customers which drives have which warranty, as it might be rather convenient for them not to.

Channel partners have received a letter from SelectWD about this:

Thailand Floods: HDD Prices To Remain Extortionately High As Supplies Get Tighter

The recent dreadful flooding in Thailand has forced the closure of several hard drive factories. The immediate concerns of course, are for the health and wellbeing of the people living and working in the area. The wider concern is the severe restriction in hard drive manufacturing capacity. Already, prices have doubled or tripled, depending on the exact model affected. The biggest HD manufacturer, Western Digital, has been hit the hardest, as IDC predicts that up to 75% of its production will be shut down. This means, that the big corporate HDD customers, those like HP and Dell, who build computer systems in large volumes, will get whatever inventory is available to fully satisfy their needs. Whatever is left is then sold on to the retail channel, for ordinary consumers to buy. IDC believes that hard disk production will reach pre-flood levels by around March, but that HDD levels by then will be very low. The prices should go through the roof then, in the meantime. As expected, this will also increase the prices of complete systems, as such a price hike is too much to absorb fully.Source: Network World
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