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Awesome Transaction: Western Digital Buys SanDisk for $19 Billon

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    Western Digital Buys SanDisk for $19 Billion


    Western Digital Buys SanDisk1 On Oct. 21, 2015, Hard-disk drive maker Western Digital (WD) Corp agreed to buy SanDisk for a total equity value of $19 billion in cash and stock.

    Steve Milligan, chief executive officer of Western Digital, says: “this transformational acquisition aligns with our long-term strategy to be an innovative leader in the storage industry by providing compelling, high-quality products with leading technology. And the combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry. I'm excited to welcome the SanDisk team as we look to create additional value for all of our stakeholders, including our customers, shareholders and employees."

    sandisk SanDisk CEO Sanjay Mehrotra says: “Western Digital is globally recognized as a leading provider of storage solutions and has a 45-year legacy of developing and manufacturing cutting-edge solutions, making the company the ideal strategic partner for SanDisk. Furthermore, this combination also creates an even stronger partner for our customers. Joining forces with Western Digital will enable the combined company to offer the broadest portfolio of industry-leading, innovative storage solutions to customers across a wide range of markets and applications."

    The transaction will be financed by a mix of cash, new debt financing and Western Digital stock. And, it is expected to close in the third calendar quarter of 2016. As a matter of fact, this combination has aroused wide concern. Why WD would like to buy SanDisk? Is SanDisk really worth $19 billion? In general, different people have different opinions, and I guess the following 3 factors stimulate the purchase.

    Why Western Digital Acquires SanDisk


    1: Enter the Growing SSD Market


    wd

    Western Digital, founded 45 years ago, is an industry-leading developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content, and it has its traditional business model built around volume business from the PC ecosystem. However, the Wall Street Journal wrote: "Western Digital is facing challenges to its core hard-disk-drive business, which has been under pressure from the success of sales of Apple Inc.’s iPad and other tablet computers that store data on flash-memory chips rather than on magnetic disks". Here, this combination represents another effort by a leading vendor from traditional IT computing repositioning itself for the demands of digital IT computing.

    SanDisk is a global leader in flash storage solutions. For more than 27 years, SanDisk has expanded the possibilities of storage, providing trusted and innovative products that have transformed the electronics industry.

    market of hhd and ssd

    According to a survey by Market Realist, the market of HDDs, where WD is the leader, is going to be down in the years coming. On the other side, the market of solid-state drives will grow rapidly. WD controlled 43% of the market for traditional hard disk drives last year, but it only has a small market share in solid-state drives. Despite their higher cost, SSDs have displaced HDDs in higher-end tablets and PCs over the past few years since the former is smaller, faster, and doesn't have damage-prone moving parts.

    ssd share

    And, Market Realist also makes a market survey to obtain some information about SSD market share in 2014. To be specific, Intel (INTC) is a market leader in the enterprise SSD space with a 27.4% share, which is followed by Samsung and SanDisk, both of which claimed a 14.7% market share in 2014. And, Western Digital and Micron (MU) held 10.2% and 5.1% respectively. That is to say, to enter the SSD market, WD needs to buy other companies like SanDisk for more market share.

    Maybe, some users are probably wondering: “Why does WD choose to acquire SanDisk rather than any other companies like INTC, and Samsung?” As a matter of fact, if WD plans to buy INTC (It is one of the world's largest and highest valued semiconductor chip makers, based on revenue), cost would be much higher. Note: Intel's market capitalization is $162.97 billion (February 21, 2015). Besides, it’s clear that Samsung will not work with WD since it has sold HDD division to Seagate with keeping its SSD business. And, WD does not acquire Micron largely because Micron’s SSD technology is still in its infancy.

    2: Access to The 3D NAND Flash Technology

    Jeff Janukowicz, research vice president at IDC, says: “This combination will give WD an instant foothold in the global, non-volatile NAND flash memory market.”

    With this transaction, Western Digital will double its addressable market and expand its participation in higher-growth segments, and gain access to SanDisk’s 27 years of innovation and expertise in NVM (non-volatile memory), systems solutions, and manufacturing. In addition, the combination also enables Western Digital to vertically integrate into NAND, securing long-term access to solid state technology at lower cost.

    NAND flash also uses floating-gate transistors, but they are connected in a way that resembles a NAND gate: several transistors are connected in series, and the bit line is pulled low only if all word lines are pulled high (above the transistors' VT). These groups are then connected via some additional transistors to a NOR-style bit line array in the same way that single transistors are linked in NOR flash. ------------ wikipedia

    NAND flash memory is a type of non-volatile storage technology that does not require power to retain data. SanDisk is a major player in the NAND flash memory market with flash products spanning consumer flash cards and USB sticks to client and enterprise SSDs as well as storage systems and supporting software. And, SanDisk announced a deal with Toshiba to manufacture the world's densest 256Gbit (32GB), 3-bit-per-cell (X3) 48-layer 3D NAND flash chips that offer twice the capacity of the next densest memory. (as shown below)

    wd vs seagate Note: Toshiba has been a long-term strategic partner to SanDisk for 15 years. WD also announced that their joint venture with Toshiba will be ongoing, which means WD will now have the same access to Toshiba’s NAND supply and technology such as 3D NAND.

    WD says: “We want to access to the flash. Our PC HDD business is declining because of the weak PC market but also because SSDs are encroaching that space. Without access to NAND flash at cost, it would be difficult for us to participate in that space and to compete with NAND players in the enterprise space. This combination provides stable NAND supply at scale through a time-tested business model and extends across NVM technologies such as 3D NAND."

    3: Remain Competitive


    combination Here, we also want to say another factor: competition. Seagate has already made strategic purchases in flash technology, including product lines that are direct competitors to SanDisk in the enterprise. WD (one of the world's largest storage manufacturer) needs to access to SanDisk's NAND technology to better compete in the market for solid-state drives used in cloud computing, data centers, smart phones and laptops.


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    Influence and Development after WD Buys SanDisk


    For Western Digital
    combination Western Digital buys SanDisk for $19 billion in cash and stock. As the storage industry attempts to reorient itself with an eye on the future, the acquisition seems like a very canny move on the part of the hard disk giant.

    With this acquisition, WD gets the substantial non-volatile memory (NVM) intellectual property and acquires flash memory manufacturing through the SanDisk joint venture with Toshiba. In addition, this combination enables WD to vertically integrate into NAND.

    create a global leader in storage technology

    For both WD and SanDisk
    Besides, WD and SanDisk's complementary product lines (HDDs, SDDs, cloud datacenter storage solutions and flash storage solutions) will provide the foundation for a broader set of products and technologies from consumer to data center. Both of them have strong R&D and engineering capabilities and a rich base of fundamental technologies with over 15,000 combined patents issued or pending worldwide.

    For Storage Component Business
    Last but not least, this combination will undoubtedly trigger other mergers and acquisitions in the storage component business. For instance, Seagate will likely face pressure to create its own alliances or mergers since it doesn’t have direct ownership of flash memory manufacturing. And many smaller SSD manufacturers will face pressure since emerging mega-storage companies (like WD & SanDisk) will have vertical integration of flash chips and controllers. Within a few years the non-volatile memory industry will undoubtedly look much different than it does today.

    Next, we are going to introduce 2 programs which can help you get most from both WD and SanDisk's products like HDDs, SDDs, memory cards and USB drives.

    2 Necessary Tools for WD and SanDisk Users to Install

    In the information age, mechanical hard disk drive, solid state drive and other storage devices including SD card and USB drive play a great role in our world. For instance, we store massive important data and files on hard disk drive and SSD; we install or transfer our operating system to SSD to optimize computer performance; we use USB drive to transfer some data. However, it is believed that many people have ever encountered partitioning problems and data loss issues. For example, space of storage devices is missing; we failed to align SSD partitions or migrate OS. But fortunately, most issues could be easily solved by MiniTool’s products.

    MiniTool Partition Wizard, a free and green partition magic, offers excellent features (like extend partition, move/resize partition, delete partition, copy partition, align partition, copy disk, wipe disk, etc.) to help users manage partitions on both hard disk and removable devices easily and quickly. MiniTool Power Data Recovery, an excellent data recovery program, provides 4 modules to help recover lost data from HDD, SSD, memory card, USB drive and other storage devices effectively. Next, we take SSD for example to show what MiniTool products can help users do.

    MiniTool Partition Wizard


    1: Extend the Partition Which Runs in Low Disk Space

    Someday you may find one of partitions on your SSD (especially boot partition) just has several GB or less free space left. At this time, it’s a wise choice to use the “Extend Partition” feature provided by MiniTool Partition Wizard, because it can help you enlarge the partition without any data loss.

    In the main window of the partitioning software, we need to select the partition which runs in low disk space, and then choose “Extend Partition” from the left side to get the window below:

    extend-c-drive

    Then, choose an unallocated space or existing partition from the drop-down list of “Take Free Space from” to take free space to enlarge the previously selected partition, and next drag sliding button to decide how much space to take. Afterwards, click “OK” to go back to the main window. Finally, click “Apply” button to make all changes performed.

    2: Align SSD Partition for Better Performance

    Compared with common hard disk, a solid state drive (SSD) is much better largely because of its amazing speed. However, if partitions on SSD are misaligned, both read and write speed will be affected. Therefore, it is very necessary to align partitions when there are misaligned partitions on SSD.

    As we know, under Windows 7 and later Windows OS, all newly created partitions will be aligned automatically. However, if a partition on SSD has been operated (for example, we changed its size), it may become unaligned. Moreover, if partitions on SSD are copied from other disks, they are always unaligned. In those cases, we need to align its partitions to enhance data read-write speed and optimize disk performance. For more information, please see how to align SSD partition.

    3: Migrate OS to SSD

    Nowadays, more and more people choose to migrate OS to SSD or replace the old system disk with a new SSD to optimize computer performance. Some SSD manufacturers like Samsung offer data migration tool to help their users do the migration, but problems appear frequently. For more details, please see our previous post Failed to Migrate Your Disk or System to SSD? Try This Way. Actually, users can turn to the “Migrate OS to SSD/HD” feature of MiniTool Partition Wizard, which has been proved to work well for this issue.

    In the beginning, we need to connect our SSD to computer (it had better be connected via SATA) and then click “Migrate OS to SSD/HD Wizard” from left Wizards column. Next, select the SSD and then click “Next” to get the following window.

    migrate

    Now, choose a suitable copy option and then click “Next”. Note: the option boxed by red line has been checked by default. And it will improve performance of SSD. After that, click “Finish” button to go back to the main window of the program. Finally, tap “Apply” in the left side of toolbar and click “Yes” in pop-up prompt window to carry out pending operations.

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    Recover Lost Data

    A survey from data recovery companies shows SSD takes a big portion in the storage media from which people often lose their data. Therefore, how to easily and timely recover lost data from SSD has become a topic of concern.

    pdr

    MiniTool Power Data Recovery can help users restore deleted data as well as recover data from lost partition, RAW partition and formatted partition from SSD or other storage devices. Just choose the correct recovery module, and then detailed instructions will be given.

    However, when recovering data from SSD with this tool, we have to pay attention to the Trim feature, which allows an operating system to inform a SSD which blocks of data are no longer considered in use and can be wiped internally. If we mistakenly deleted files from a SSD with Trim enabled, we may have no chance to recover the lost data. For more information, please see SSD Data Recovery.

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    Conclusion

    Now, you may get a basic understanding of the transaction that WD buys SanDisk. If you are not clear enough about this combination and have encountered some issues with your SSD or other storage devices, please leave comments and we will try our best to solve it one by one.