Samsung May Off Its Hard-Drive Business

For a money-losing part of its business, Samsung (News - Alert) is looking to trim a bit of fat to raise some cash.

The tech company is considering selling off its hard-drive unit. Citing an unnamed person familiar with the matter, The Wall Street Journal reported that South Korea’s is hoping to raise about $1.5 billion in the sale, though it may settle for less than $1 billion to rid itself of the business. The source told the Journal that, in no uncertain terms, "Samsung is trying to get rid of [its HDD operation]," and one of its chief competitors, Seagate (News - Alert), is a potential buyer.

Samsung manufactures 3.5-inch EcoGreen and Spinpoint drives with capacities up to 2TB. Were Seagate to buy the Samsung HDD business it is likely these brands would be transitioned to the equivalent Seagate brands. Seagate has yet to issue a comment on the report.

"We are reviewing various business opportunities but we don't comment on market speculation," a Samsung spokesman in Seoul said.

The Korean consumer electronics company had warned that it expected to see its profit decline sharply during the winter quarter, and many think that Samsung hard drive business, which is one of the company’s more consistent money-losing businesses, could be weighing the group down. So, from a business perspective, moving out of the moving parts hard drive makes sense for the company.

South Korea's Samsung is the world's top maker of memory chips and flat screens, but it has struggled in the hard-disk-drive business.

"HDD is not one of Samsung's core businesses, but it has kept the operation in its semiconductor portfolio as there are some technological synergies to be gained between HDD and SSD businesses," said Seo Won-seok, an analyst at NH Investment & Securities.