Strategic Alliance Between Micron and Seagate on NAND Supply and SAS SSDs

Micron Technology, Inc. and Seagate Technology plc announced a strategic agreement that establishes a framework for combining the innovation and expertise of both companies.

The framework of the agreement will enable customers of the two companies to benefit from a focused approach to deliver industry-leading storage solutions, helping them innovate faster and more effectively.

While initially focusing on next-generation SAS SSDs and strategic NAND supply, the two companies anticipate that this multi-year agreement will extend into future collaboration on enterprise storage solutions featuring Micron NAND flash memory.

“As two of our key partners, we look forward to the benefits of this Micron and Seagate collaboration in future NAND flash-based storage technologies,” said Mike Kerouac, president, global product operations, EMC Corporation.

“The strategic agreement between Micron and Seagate promises to deliver new and innovative flash-based storage solutions,” said Trevor Schick, SVP, EG global supply chain, Hewlett-Packard Development Company, LP .

“This agreement enables Seagate to secure a strategic supply of NAND flash memory and enables collaboration on future products and technologies,” said Phil Brace, EVP, electronics solutions, Seagate. “Our companies are leaders in the storage industry, and in working together we build on that success.”

“The collaboration will assure both Seagate and Micron target the growing enterprise flash market with industry-leading offerings across both of our product portfolios,” said Darren Thomas, VP of storage, Micron. “The relationship provides Micron access to enterprise drive technology and platforms, expanding our portfolio and accelerating our push into the enterprise market segment.”

Comments

This press release is not perfectly clear. But what we mainly understand is that Micron is becoming a supplier of flash chips for Seagate's SSDs.

In 2011, there was already a similar supply agreement with Samsung:" A NAND flash memory supply agreement under which Samsung will provide Seagate with its market-leading semiconductor products for use in Seagate’s enterprise SSDs, solid state hybrid drives and other products."

So we conclude that Seagate - that also acquires at the same time the Samsung HDD division - was not happy with the partnership with the Korean company being also a manufacturer of SSDs in competition with Seagate. But it's also the case with Micron offering SAS and PCIe SSDs.

Other flash chips makers involved in SSDs are Toshiba (with OCZ acquisition) and SanDisk, SK hynix being in NAND flash chips only.

In the reality Seagate never was a big actor in enterprise SSDs, far behind HGST, Intel, Samsung, SanDisk and Toshiba. It has invested a lot in this technology, in R&D and acquiring from Avago the LSI flash business for $450 million last year. It's a shame because Seagate is in the best place to sell enterprise SSDs being the leader in enterprise HDDs and consequently knowing all the main OEMs and big distributors for these types of products.

It was a big strategic error for Seagate WD not to invest in flash NAND manufacturing, even if this operation needs several billion of dollars. It's probably too late. Toshiba is the ontly firm at the same time in HDD, SSD and flash chip buniness.

As we already wrote, we predict the final winners of the SSD market will be the chip makers being vertically integrated as chips are by far the most costly components in SSDs.