Hitachi, Toshiba, and Fujitsu joining hands for hard drive spinoff?

According to excited rumblings emanating from "undisclosed sources," drive-maker Hitachi is in talks with Fujitsu and Toshiba over the formation of new joint-company dedicated to hard drives and other storage systems. Apparently, Hitachi has had early discussions with the equity firm Silver Lake over spinning off its recently-troubled hard drive unit, though apparently the conversations haven't exactly been fruitful. Silver Lake has long-standing ties to Seagate, and observers (again, unnamed) have alleged that the company doesn't understand a traditional Japanese business. If the deal is going down, "sources" and "observers" say it's likely to happen no later than April 1st, though we officially cock one eyebrow, prop our elbows onto the dinner table, and declare, "Oh really?"

[John @ Jan 12th 2008 4:34AM]

It would be good to see all the Hard Drive Manufacters come together and build a mega drive something that they can all say we made and can all say for once we put our competitive side down for a few minutes and got together to build something awesome.

That's my dream anyway :P

I don't personally think this will happen but I have been wrong before.

[Miguel @ Jan 12th 2008 4:45AM]

Something for which they can all say "we made it, and now we get to price-fix it."

[Carbonize @ Jan 12th 2008 4:46AM]

Toshitsu drives?

Has to be a good thing all round though. Each companies R&D goes in separate directions and this should bring together the best of their research into one drive.

[Totalfixation @ Jan 12th 2008 7:21AM]

Does it bother anyone that those three companies are Japanese? I mean even though I'm Asian and kinda understand the mentalities of Asian culture. I know they want to boost there country's economy. In some ways allow them to have some sort of recognition in there own country, that, "these three Japanese companies are working together, working hard to compete against the American companies." I find it kinda disappointing that still in today's world we have to see where certain companies will only work with another certain companies because of there back round. That kind of upsets me. Similar to saying we cant work with another American company but we can work with our own company because its either Japaneses based or originated from japan. Does anyone get what I'm saying? it just seem so closed minded to me. Also I can see the argument about how silver lake not understanding the Japanese culture, but i see it time and time again that it's the American who have to take the time to fully understand another county's tradition in order to do business. I don't know, i might be wrong on this but i do hope someone give me some reason to differ.

[James Yopp @ Jan 12th 2008 10:29AM]

I think you're right, FWIW, but it goes a little deeper than that. Remember that business arrangements like this are the de facto standard in Japan, and the deregulation and antitrust attitude that Koizumi and Abe had was not very popular. There is starting to be a resurgence of industry-protecting cartels and cross-holdings of company stock to ensure that industry companies, and therefore jobs, become stable again.

There may or may not be sound economic theory behind it -- Economics is all about psychology, so if that's what the stockholders, employees, and customers expect of the companies involved, and they all feel like they benefit from it, it's appropriate. Remember that (in general) corporate competition is quite a vulgar topic in Japanese society, but corporate and social cooperation are virtues. Consumers don't care as much about lower prices through competition as they care about fairness and job security. If you think about your company as a family, you'll get some of this -- you wouldn't want to start a feud and go to war with another family if peaceful coexistence or even cooperation was an option.

On some other level, though, you've got tons of fifty- and sixty-something managers approaching retirement age, who are seeing their corporate culture eroded by a combination of young people who aren't "growing up" and donning the mantle of traditional Japanese adulthood, and a hybridization with Western business practices. This could simply be a last-ditch effort by the old guard to commit their organizations to keep with the old ways after they're gone.

[synf @ Jan 12th 2008 8:09AM]

chortle! i like a good pun!

-synf

[Brian @ Jan 12th 2008 3:31PM]

Price fixing for the lose! This must be illeagal! Please don't let it happen :(

Segate, Wester Digital, Toshiba, Samsung, Hitachi, Fujitsu competing = $100 500gb drives. How long do you think it will take until we have $100 1TB drives? (Answer: Never, if there isn't competition)