Your email address:

Powered by FeedBlitz

Or add to your news reader: Add to My Yahoo! Add to Google

Thursday, June 19, 2008

Seagate could take Intel out of their SSD JV

It's well known that Intel wants to exit the NAND business. It's a drag on earnings, it's very commodity oriented.

It's also known that Seagate is looking to punch a way into the SSD business. I think this is smart. The SSD business is likely to start to encroach on the mobile HDD market in a year or two. Small form factors and low power consumption are prized traits in mobile technology. The mobile HDD market is also far more profitable than the aging desktop drive market. As such, it will become important to lay claim to emerging technologies there.

Dan Amir of Lazard, in a research note published today, postulates that Seagate may be looking to acquire Intel's interest in IMFT, the NAND JV with Micron. As I believe drive makers will need to have an SSD offering in the future, I think this would be strategically sound on Seagate's part. My guess is it'd be good for the stock too as it would remove the question of what they're planning to do. A deal for Intel's stake would likely have some guaranteed purchasing embedded within the agreement and Intel already has some design wins (Sun Micro, for example). Investors would also likely celebrate Intel's exit from NAND.

I hope he's right.

No comments:

Blog Archive