Global EMS Market Reaches $555 Billion in 2019
by 
Tsinghua-owned Unisplendour Corporation Limited (Unis) is investing $3.775 billion in Western Digital, giving the company a 15 percent equity stake in the U.S. data storage maker. The investment also gives Unis “the right to nominate one representative to the Western Digital board of directors.”
“The equity investment by Unis will help facilitate our growth as we look to capitalize on the many opportunities and changes within the global storage industry,” said Steve Milligan, president and chief executive officer, Western Digital, in a statement. “This investment reflects Unis’ strong support for Western Digital’s value-creation efforts.”
“We are excited to establish a relationship with Western Digital, a leading company in the storage industry with a capable and talented management team and workforce. We believe this long-term investment will serve as a constructive collaboration model for Chinese and U.S. companies to work together for success,” said Weiguo Zhao, chairman of Tsinghua Unigroup and Unisplendour Corporation, in a statement.
With this deal, market researcher TrendForce expects flash-related devices to become a developmental focus in China’s semiconductor sector, and strengthen its efforts to develop its domestic ICT equipment industries.
The global solid-state drive (SSD) market is forecast to reach $229.5 billion by 2022, up from $15.1 billion in 2014, growing at a compound annual growth rate (CAGR) of 40.7 percent from 2015 to 2022, according to Transparency Market Research. In 2014, Asia Pacific accounted for 57 percent of the global SSD market, and is expected to be the fastest-growing market for SSDs in terms of revenue over the forecast period. The market research attributes the growth to an expanding customer base and high IT infrastructure spending in countries such as Japan, China, and Taiwan.
“In the past three years, participants in the data storage equipment and HDD industry have hurried to develop strategies for NAND Flash storage as this technology has steadily gained market influence,” said Sean Yang, assistant vice president of DRAMeXchange, a division of TrendForce, in a statement.
This has resulted in an aggressive round of mergers and acquisitions with transaction prices getting higher, Yang added. “Western Digital is currently the quickest among its competitors in acquiring other data storage device makers and has spent over $1.1 billion on deal-making. With wide-ranging sets of SSD and HDD solutions, the company is an attractive investment target.”
“Establishing a NAND Flash industry goes beyond gaining the capability to produce Flash memory chips,” Yang continued. “Application markets for data storage products need to be developed and various segments of the industry chain must link up, including system integration, software, firmware, hardware and controller chips. All of these are crucial elements to this industry’s growth. As the Chinese semiconductor sector is moving forward with setting up domestic manufacturing of data storage equipment, it will make sure that suppliers of NAND Flash chips and other related components are included in its plan. And this is also why Tsinghua Unigroup’s investment in Western Digital is a significant indicator of this recent industry trend.”
Related posts
