Western Digital Corp., the 2nd largest HDD maker, announced that it had acquired SiliconSystems, Inc. for $65 million in cash. SiliconSystems is a major supplier of embedded SSDs to the network-communications, industrial, embedded-computing, medical, military and aerospace markets.
WD is no stranger to SSDs having dabbled in the technology in the early 1990's and being a founding investor of SanDisk which also developed flash-based SSDs in the same time period. However, it appears that early experience wasn't enough for a latecomer to catch up to the vast improvements in performance and reliability made by SSD vendors recently. System-level solutions particulary on the firmware side are required to manage the increasing complexities of NAND flash with each new technology generation.
WD is now able to leverage SiliconSystems' knowhow and IP to accelerate its development of SSD computing solutions. This knowhow combined with WD's branding and client relationships could make WD a formidable SSD vendor and validates the market opportunity provided by SSDs.
This acquisition will compel HDD suppliers to review their own internal development plans and may be the first with others to follow.
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2 comments:
What percentage of the SSD market would you guesstimate that Silicone System controls?
It will be interesting to see how WD leverages SiliconSystems. Breaking into the consumer laptop market with SSD is crucial - but if their performance isn't good enough they will suffer badly. The performance numbers for Silicon aren't that great. Hopefully they are doing some work on enterprise class drives. That's where the margins should be. Next up is seagate...
gene ruth, Senior Analyst, Burton Group
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