Western Digital Takes Aim at Read-Rite

Computer hard drive manufacturer Western Digital said it
has succeeded in its bid to acquire the assets of bankrupt hard drive parts maker Read-Rite
for $95.4 million in cash.

A bankruptcy court presiding over the Read-Rite assets approved the sale
including its wafer fabrication operation in Fremont, Calif., as well as an
option to buy its Thailand facilities. The Thailand operations have debt
obligations of roughly $62 million.

Western Digital, which produces hard drives for PCs, personal entertainment
devices and enterprises, said it chose Read-Rite to bolster its magnetic
recording head technologies, including 80GB recording heads, over the long
term and increase its operational flexibility. The purchase will also help
Western Digital better compete with leading rivals Seagate Technology , Maxtor and Hitachi .

Western Digital recently unveiled its WD Caviar Special Edition (SE) Serial
ATA (SATA) hard drive, which runs at 10,000 RPM. The hard drive features
capacity as large as 250 GB and 8 MB buffer to serve market segments such as
high-end PC, workstation and entry-level servers.

Serial ATA drives are considered the next big thing in the hard drive space,
where speed and capacity come at premium as vendors look to bring the
fastest, most reliable and capacious products to the fore in a time when
customers’ data is increasing.

Serial-attached storage has been gaining momentum in the industry of late.
Many IT experts have found it less expensive, more scalable, and more
efficient than other modes of data transfer, such as parallel technologies.
Serial technologies transfer data packets one at a time, while parallel
technologies transfer data concurrently.

To wit, Western Digital also recently unveiled SecureConnect SATA cable
technology, which is designed to solve a weakness of first-generation SATA
hard drives and cables by strengthening the drive-cable connection by more
than 500 percent, while ensuring the hard drive maintains backward
compatibility with older SATA cables and backplanes.

This is intended to eliminate SATA connector breakage as well as reduce the
number of related product returns to hard drive makers and systems

The purchase of Read-Write is expected to close within 10 days, subject to
the terms of the sale order issued by the bankruptcy court.

Founded in 1970, Lake Forest, Calif.’s Western Digital is one of the storage
industry’s longer-standing hard drive makers. The company earlier this month
indicated plans to embrace more of the world when it made its Web site
available in Russian, German, French, Spanish, Portuguese, Korean, Japanese,
and traditional and simplified Chinese, as well as in English.

“Western Digital is focused on continuing its growth worldwide, including
emerging markets with high-growth demand for hard drives,” said Richard E.
Rutledge, Western Digital’s vice president of marketing.

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