infoTECH Feature

November 03, 2010

Hitachi GST Gets Ready for an IPO

Hitachi Global Storage Technologies (Hitachi GST), a wholly owned subsidiary of $100 billion Hitachi Ltd (News - Alert)., commenced preparation to make an initial public offering (IPO) with a listing on the New York Stock Exchange or National Association of Securities Dealers Automated Quotations (Nasdaq).

The hard disk drive and storage solutions provider expects to use the proceeds of the IPO for, among other things, ongoing operating and capital expenditures, research and development, strategic activities and general corporate purposes. Hitachi and Hitachi GST (News - Alert) will monitor economic and capital market conditions relative to the timing of the proposed IPO, said Hitachi.

Hitachi GST was established in 2003 and maintains its U.S. headquarters in San Jose, Calif. Media reports indicate that Hitachi GST is the third-largest disk drive manufacture in the world with 17 percent share of the market. The top two players are Seagate and Western Digital (News - Alert), each accounting for over 30 percent of the market by volume.

Recently, the company reported third quarter revenues of $1.49 billion, a 16 percent increase compared to the third quarter in 2009, but a 0.4 percent decline as compared to the second quarter. Also, the operating income declined in this quarter versus the preceding quarter.

In essence, the hard disk drive business is struggling to grow as notebook and tablet makers migrate toward solid-state drives and flash memories. A good example is Apple's (News - Alert) ultra-light MacBook Air notebook computer, as well as its iPad tablets. Both devices rely on flash memory instead.

Hitachi is making a smart move in spinning off its hard drive business, especially in light of the rapidly growing tablet computer market. The question now is how much success it will find in selling its GST IPO to investors, according to a news report in DailyFinance on Tuesday.

Interestingly, the parent company’s data storage system’s arm, Hitachi Data Systems, seems to be doing right. In TMCnet’s “On the Road” video series, CEO Rich Tehrani (News - Alert) asked Hitachi Data Systems’ vice president and CTO Hubert Yoshida to give the readers a glimpse of where storage was heading. And to shed some light on the evolution taking place in this field in last couple of years. Click on the link below to see how Yoshida responded to Tehrani’s questions. 


Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Jaclyn Allard
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