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Alps to sell HDD head assets to rival TDK

Posted: 21 Mar 2007     Print Version  Bookmark and Share

Keywords:HDD head  hard disc drive  disc heads  Alps  TDK 

Alps Electric Co. Ltd. will back out of the hard disc drive (HDD) head business with the sale of its magnetic device division's assets and related intellectual property to rival TDK Corp.

The two companies announced last week (March 15) that they have signed a memorandum of understanding on the transfer of Alps' business to TDK. They plan to complete the deal within the next fiscal year ending March 2008.

In addition to TDK, Alps was a major global supplier of disc heads. But Seagate Technology LLC's acquisition of Maxtor Corp. last May was a big blow to Alps. At that time, Alps counted Maxtor as a major customer. But when Seagate switched to its own internally manufactured heads in preference to Maxtor's, Alps lost about Rs.992.70 crore ($255 million) in sales.

Alps expects that revenue in its magnetic device division will drop by 35 per cent to about Rs.1,923.63 crore ($436 million) in the fiscal year ending this month. The business is expected to see red ink by the second half of this fiscal year.

Alps and TDK plan to nail down the details of the transfer within a year. The company intends to switch the staff and buildings once devoted to the magnetic head business to other businesses such as sensors, thus avoiding layoffs.

- Yoshiko Hara
EE Times

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