Western digital acquires Hitachi Global Storage Tech for $4.3B

Indeed. I've deleted my posts below as they make no sense with what you correctly pointed out.

Corrected

There's something about these large Japanese conglomerates that just don't seem to have any parallel in the US. GE might be the closest thing, but even though it's a larger company it doesn't seem to have the finger-in-every-pie feel that these Asian conglomerates do (e.g., Hyundai, Fuji, Mitsubishi, ...)

In the past few years, they had the lowest failure rate, by a large margin, on professional grade drives. I say that having set up and sold many thousands hard drives since 2003.

It's a little difficult to interpret, but that's 0.6 billion units shipped, not $0.6 billion.

You're severely underplaying the HD storage market's revenue. Western Digital alone had nearly $10 billion in revenue last year.

Also, Hitachi GST is a partner of Intel's for SSDs... Seems like a good acquisition for WD.

The price might be high, but I figure this (consolidation of market participants) is normal in a market that is peaking or on the decline.

Now that top tier drive maker has acquired the 2nd or 3rd tier maker expect storage prices to go up. Seagate isn't the competition it used to be.

This isn't just about hard drives. Hitachi Storage also makes some pretty huge -- and well-regarded -- SANs, and enterprise storage is one area into which I've never really seen WD make much headway. This acquisition would make them a full-spectrum player in the storage market.

Enterprise storage is also an area with rather higher profit margins than merely hawking spinning rust.

The acquisition may make sense in light of a saturated market. They effectively kill off a competitor and can move in on their customers.

From WD's press release:

Calendar 2010 was a year of tremendous opportunity for the hard drive industry with 651 million drives shipped. That's 330 million terabytes of storage capacity sold into a broadening set of applications and markets. At 16%, this was the industry's strongest full year unit growth in five years. Rotating magnetic storage remains the dominant technology solution for high-volume mass storage of digital content in both the consumer and commercial markets. Full year revenue for the industry expanded by some 13% to $34 billion.