Infineon Technologies has agreed to sell its hard-disk-drive operations to LSI under terms that were not disclosed. Infineon’s HDD business designs, manufactures and markets chips to power and control the drives used in computers and gaming machines.
The sale, expected to close in the second quarter, is a step toward focusing on Infineon’s core markets, said Vice President Sandro Cerato. “In LSI, we have found an excellent company with a mutual interest in supporting our customer base,” Cerato added.
Looming SSD Migration
LSI expects the acquisition will further its goal of becoming the leading worldwide provider of silicon solutions for hard-drive makers, said LSI Executive Vice President Ruediger Stroh. “We expect the acquisition to immediately accelerate revenue with a top-tier customer, Hitachi Global Storage Technologies, while enhancing our competitive position in the desktop and enterprise space,” he said.
Last August, Infineon agreed to pay $563.6 million to acquire LSI’s mobility products business “to significantly strengthen our position at important mobile-phone makers,” said CEO Wolfgang Ziebart. But when Infineon announced its new deal with LSI this month, the German-based chipmaker declined to elaborate.
One factor that presumably influenced Infineon make is the computer market’s looming migration from chip-controlled mechanical hard disks to storage devices based on semiconductors. Research firms such as Gartner and iSuppli believe the new solid-state drives will be a disruptive technology because they are lighter, more resilient and faster than HDDs, which are also power hogs by comparison.
“With SSDs you get a much faster startup and resume, so the performance appears to be faster,” said Gartner Vice President Leslie Fiering.
Moreover, head crashes on hard drives are eliminated because SSDs have no mechanical parts. “Right now, HDDs are tied with motherboards as the No. 1 source of PC failures,” Fiering said.
Falling Prices
The cost of a solid-state…