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ST offloads HDD controller division to Western Digital

Posted: 31 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:hard disk controller? HDC business? IP right?

Hard disk manufacturer Western Digital has acquired the hard disk drive (HDC) controller IP rights, design tools and design team from STMicroelectronics NV. Financial details remained undisclosed.

In his introductory speech at company's analysts' conference on July 24, John Coyne, president and CEO of Western Digital, commented on the financial performances for fiscal year 2008 and, unexpectedly, revealed the so far well-kept secret. The transaction took place a month ago and no word was uttered by either of the parties.

Coyne stated, "In June, in a further strategic step to accelerate our technology development and deployment, we acquired the HDC IP rights, design tools, and design team from ST. This in-house HDC capability will enhance the efficiencies of our development process with our existing SoC supply partners."

In a Q&A session, Coyne was asked to comment on the transaction and, more specifically, on its meaning for the company's design and product development projects.

Coyne replied, "When you own all of the technology pieces, you can better and more efficiently and more timely put together the optimization of the system, and so we did that with Hedge, we did it with Media, and we've now brought HDC controller design and development back into the company again. We've had it outside for maybe eight years, I guess, something in that range."

He added, "So we brought that capability back in house and the objective there is to improve the efficiency so that the HDC core, just like all of our competitors have their own HDC capability, we now have that and therefore all of the firmware that we write to operate that core can now be common across our multiple drive platforms, and can bewe'll continue to then embed that technology in the SoCs, paired up with the best channel and the best execution with our existing SoC suppliers. So it helps us on efficiency and it helps us on speed."

ST roadmap
The announcement follows a declaration from Carlo Bozotti, ST president and CEO, disclosing that the company would continue to divest product families. At a press and analysts' conference on July 23, Bozotti declared, "In terms of separation, yes, indeed, we are working on two fronts," stated Bozotti.

First, he explained, "We are working on the restructuring of our manufacturing infrastructure. We want to move from the 25 manufacturing centers that we had in 2005 to 12-13 manufacturing centers. With the separation of the flash [memory business] and the other initiatives, we are making big progress."

The second action is on the product portfolio. Bozotti commented, "There are a number of families that are under scrutiny. Of course, the size of this business is not at the same level as the flash memory business. But, we are talking about hundreds of millions of dollars."

Bozotti, however, refused to mention the names of the product divisions in the hot seat. It seems that he has been caught on the hop by Western Digital's CEO.

Contacted by EE Times Europe, the spokeswoman for the group said ST is not able to comment on any details of the transaction, or other confidential information regarding Western Digital. ST, however, confirmed that it "continues to have a good relationship with them."

- Anne-Francoise Pele
EE Times Europe

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