[Techtaffy Newsdesk]

Toshiba has entered into a definitive agreement with Western Digital on its acquisition of certain Western Digital 3.5-inch HDD manufacturing equipment and related intellectual property, and the transfer to Western Digital of Toshiba Storage Device (Thailand), Toshiba’s wholly-owned HDD manufacturing subsidiary located in Thailand.

Toshiba and Western Digital aim to complete the acquisition and transfer by March of this year after obtaining approval from the relevant authorities.

Under the agreement, Toshiba will acquire the following equipment and intellectual property from Western Digital – 1] Manufacturing equipment for 3.5-inch HDDs for use in desktop PCs and other consumer applications, plus related intellectual property; and 2] Manufacturing equipment for near-line HDDs for server applications.

Toshiba will transfer to Western Digital its entire shareholding in TSDT. Toshiba’s acquisition of assets from Western Digital and the transfer of TSDT to Western Digital are subject to Western Digital’s completion of its pending acquisition of Hitachi Global Storage Technologies and regulatory approvals from the relevant antitrust authorities.

Toshiba will transfer the shares of TSDT to Western Digital and consolidate HDD production at its two HDD manufacturing facilities in the Philippines and a contract manufacturer in China.

TSDT manufactured hard drives but has not resumed operations after the recent Thailand flooding. The principal assets of TSDT are its Thailand property, facilities and employees. Subject to completion of the transaction, WD plans to integrate these facilities and employees into its Thailand operations. The financial terms of the two agreements were not disclosed.

Toshiba acquired Fujitsu’s HDD business in 2009, expanding its product portfolio of small form factor HDDs for mobile applications with Fujitsu’s enterprise HDDs. Since then, the company has developed a line-up of storage products for enterprise applications. More recently, in July 2011 Toshiba unified the Semiconductor Company and the Storage Products Company, covering NAND flash memories, SSDs and HDDs.

The purchase of part of Western Digital’s 3.5-inch HDD manufacturing equipment and with it the capability to produce 3.5-inch HDDs for desktop PCs, DVR and other consumer applications, will expand Toshiba’s portfolio and enable the company to supply products covering all segments of the HDD market. It will also expand Toshiba’s supply capacity in the market for near-line HDDs.