Is SanDisk becoming an acquisition target as the market consolidates?

‘We don't comment on rumour or speculation’. But we do


Rumors and speculations are mounting that SanDisk might be an acquisition target, with reports indicating it's been chatted up by two suitors wanting to buy it, with Western Digital (WD) in the frame.

There is strong logic for such a deal, as SanDisk is a hugely hot flash product supplier, and partners Toshiba in the flash foundry business.

It has flash chips with 3D ones coming, ULLtraDIMMs (flash DIMMs), Fusion-io hardware and software IP, PCIe flash cards, caching software, SSDs, and the InfiniFlash array – the flash equivalent of a JBOD – which is OEM'd by Tegile.

The disk drive business, after many years, has consolidated to just three vertically integrated suppliers. Two of them are expanding up the stack into selling disk drive arrays, meaning WD's HGST unit and Seagate.

It's taken 20 years or more for this consolidation to happen.

The flash foundry suppliers are four in number: Samsung, Intel/Micron, SanDisk/Toshiba, and SK Hynix. They sell chips to SSD, PCIe, and flash array suppliers.

Micron is moving up the stack into the flash systems business and SanDisk has its InfiniFlash flash array business. No existing mainstream storage array supplier has expanded downwards into the flash component supply business.

Seagate with its Xyratex ClusterStor and Dot Hill storage array enclosure business has a strategic relationship with Micron, but no financial integration of the two firms has taken place.

Against that background, the logic of a WD acquisition of SanDisk looks compelling, especially when we note that HGST holds all the flash component assets inside the WD business, and has an Active Archive array product.

Merging SanDisk and the HGST flash business would result in a hugely strong collection of vertically-integrated flash assets, from chip production to flash array hardware and software.

Of course, just because the logic of such a union seems compelling is not enough to cause an acquisition to happen. It could certainly get financial analysts licking their lips at the possibilities, though.

SanDisk spokesperson Siobhan Lyons said, in the time-honoured phrase: "We don't comment on rumour or speculation." So there. ®


Other stories you might like

  • Western Digital open to spinning out flash, hard disk businesses
    Messrs Elliott strike again

    Western Digital has confirmed the board is considering "strategic alternatives" for the storage supplier, including spinning out its flash and hard disk businesses.

    This follows calls last month by activist investor Elliott Management, which has amassed a $1 billion investment in WD equating to a six percent share stake, for a "full separation" based on those product lines.

    In a statement, CEO David Goeckeler said: "The board is aligned in the belief that maximizing value creation warrants a comprehensive assessment of strategic alternatives focused on structural options for the company's Flash and HDD businesses.

    Continue reading
  • Elliott Management to WDC board: Spin out or sell flash biz
    HDD and NAND memory maker has 'underperformed by any objective measure'

    Updated Activist investor Elliott Management is pushing for Western Digital Corporation's board to break the business in two by splitting the hard disk drive and NAND flash divisions into separately traded entities.

    In an open letter to the board [PDF], Elliott – which has over time invested roughly $1 billion in WDC, representing about a 6 percent stake – says it is almost six years since WD bought SanDisk for $19 billion, scooping up its NAND memory biz.

    At the time, this purchase was "nothing less than transformative", the letter adds, propelling five-decade-old WDC beyond HDDs into one of the biggest players in flash. Synergies, a better strategic position, and enhanced financial profile were among the rationale for the deal, says Elliott.

    Continue reading
  • Western Digital tells EdgeRover users to patch app again
    Critical vulnerability may have allowed an attacker to escalate local privileges

    Users of Western Digital's EdgeRover app for Windows and Mac are advised to download an updated version to avoid a security flaw that might allow an attacker unauthorized access to directories and files.

    The flaw, which was given the CVE identification number CVE-2022-22988, carries a Common Vulnerability Scoring System (CVSS) severity rating of 9.1, making it a critical weakness. It has now been addressed, however, with a modification to the way EdgeRover handles file and directory permissions.

    According to Western Digital, the flaw meant that EdgeRover was subject to a directory traversal vulnerability, which may have allowed an attacker to carry out a local privilege escalation and bypass file system sandboxing. If successfully exploited, this could lead to the disclosure of sensitive information or even a potential denial-of-service attack, the firm said.

    Continue reading

Biting the hand that feeds IT © 1998–2022