Hitachi: Fiscal 3Q11 Financial Results

We publish here only the results of Hitachi Ltd.
for its storage subsystems and hard disk drive activity during third calendar quarter ended on September 30, 2011. For Hitachi (and HDS), it’s the second fiscal quarter of the year, it’s the third one for Hitachi GST (now Viviti Technologies), as the two entities do not  have the same period for their fiscal year.

Hitachi is coming back to excellent results for its storage subsystems after losing some OEMs, Y/Y revenues increasing 14% for the quarter and 13% for half of the year.

The next quarter could be the last one published by Hitachi for its HDD activity, the acquisition by WD being supposed to be closed around the end of 2011.

WD will get for $4.3 billion – if this amount is finally confirmed – a company, Hitachi GST, in good shape, with sales growing yearly by 13%, profitable, and global shipments of HDDs up 11% from calendar 3Q10 to 3Q11. Sales of enterprise drives are booming, up 50% in units shipped. Notebook shipments grew 19%. But the company continues to be weak in 3.5-inch desktop devices.

It is the reason explaining why WD proposed to the European commission to sell a desktop activity to another company? We already wrote that there were rumors of Toshiba or TDK to be eventual buyers.

Another possibility could be Shenzhen ExcelStor Technology Co., Ltd, a subsidiary of Great Wall Technology Company Limited, founded in 2000, based in Shenzhen with R&D in Longmont, CO.

It was the first Chinese hard drive company and it assembles essentially low-end and cheap 3.5-inch desktop drives – mainly for the PRC and Asian market – as well as some external devices. The smallest HDD maker, far behind Hitachi GST, Toshiba, Seagate and WD, ExcelStor got some IPs from Hitachi GST to run its HDD assembly plant.

Remember here that, in the agreement of the European Commission concerning the Hitachi GST acquisition, WD is supposed also "to the transfer or licensing of the IP rights used by the divestment business" of 3.5-inch drives. ExcelStor already got this rights from Hitachi GST. WD will have only to move some production machines from Hitachi GST to the closed plant of ExcelStor, a really cheap operation that will have to be approved by EU.

TrendFocus also suggests that a completely new company could be created in China and starting with this WD’s divestment business.

Storage systems revenues of Hitachi and HDS

  (Source: Hitachi Ltd.)