SanDisk, we could make sweet flash music together, whispers WD

First Unisplendour, then the MOFCOM OK, now this … maybe


Western Digital is considering buying SanDisk for approximately $17-$18bn, with the companies already in advanced talks and a deal possible within weeks, according to Bloomberg, after speculation surfaced last week that SanDisk was in acquisition talks with both Micron and Western Digital. The potential deal price with WD is $80-$90/share.

The winds of good fortune are blowing Western D's way these days, with the $3.8bn Unisplendour investment and MOFCOM OKing the start of WF/HGST integration activities.

And then, the icing on the cake, was that Seagate has mis-played its hand in large capacity disk drives.

The jewel in SanDisk's crown, we would think, is its foundry relationship with Toshiba, giving any acquirer a steady, reliable supply of NAND chips if the foundry deal continues. As a strong proponent of vertical integration in its disk drive business Western D will be all too aware of the lack of this in its solid state business.

As well as that, SanDisk has a lot of flash IP, a great consumer flash business, camera cards and the like, plus consumer and enterprise SSDs, PCIe flash, 3D chip developments, and system components like the Infiniflash array.

Like Western Digital's HGST unit, SanDisk has bought its way into the enterprise flash product business by acquisitions, with Fusion-io being the most prominent one:

  • Fusion-io in June 2014
  • SMART Storage for its SSDs and flash DIMMs for $307m July 2013
  • FlashSoft for PCIe flash caching software in February 2012
  • Pliant for SSD controllers in May 2011

HGST has amassed:

  • Skyera in December 2014
  • sTec enterprise SSDs for $340m in June 2013
  • Velobit caching software bought in July 2013
  • PCIe flash card startup Virident bought for $685m in September 2013
  • SiliconSystems and its SSD tech purchased for $65m in March 2009

This is consolidation in action.

SanDisk would bring a controller product line (Pliant) to Western D plus the InfiniFlash array and Fusion-io hardware and software. With its Resistive RAM tech in development and having a partnership over that with HP would raise its attractiveness to Western D even higher.

Integrating all these flash assets would take time but the end result could be an enterprise, and consumer, flash powerhouse. We're a little surprised Seagate isn't in the frame as a potential SanDisk purchaser, as a Western D/SanDisk combination would look much stronger in the flash world than Seagate's current position. Although ... Seagate has a strategic tie-up with Micron, and Micron has its 3D XPoint memory tech with Intel.

That new persistent memory tier technology is looking very strong, with industry insiders talking about Intel and Micron having a two-year lead over competitors.

Buying SanDisk would position Western D nicely with regard to XPoint as SanDisk would bring its own Resistive RAM technology to the table. We watch and wait and wonder how the Toshiba foundry tie-up deal will be treated.

It's all about who gets the flash chips on the table in this high stakes poker play. ®


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