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Hitachi, Fujitsu shed small hard-drive lines

Posted: 21 Jan 2008 ?? ?Print Version ?Bookmark and Share

Keywords:1-inch? 1.8-inch hard-disk drive? phase-out?

Japanese firms Hitachi Ltd and Fujitsu Ltd have made separate announcements that they are reducing their small hard-disk lines, citing the growth of flash drives in their statements, according to a Reuters report.

Hitachi said it will focus resources on larger 2.5-inch and 3.5-inch drives that are used in PCs and servers, and which still offer a cost advantage over NAND flash chips.

Hitachi's loss-making hard-drive unit, which competes with rivals Seagate Technology and Western Digital, shipped about 560,000 units of 1.8-inch drives from July through September, or 2.3 percent of its total hard-drive shipments. For the same period the company shipped only 3,000 units of 1-inch drives.

Hitachi, which bought the hard-drive unit from IBM for $2 billion in 2002, is reportedly in talks with U.S. private-equity firm Silver Lake about the possibility of selling a stake in the division.

Change of plan
Fujitsu, meanwhile, had announced in January 2006 that it will jointly develop 1.8-inch drives with U.S.-based Cornice for consumer electronics, with the aim of launching a 120Gbyte model by September 2007. But a Fujitsu spokesman has said that the plan is now on the shelf due to growing use of NAND flash chips. Fujitsu currently makes 2.5-inch and 3.5-inch drives.

Shares in Hitachi closed down 4.7 percent, while Fujitsu fell 3.1 percent, outperforming the Tokyo stock market's electrical-machinery index, which lost 5.1 percent.

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