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SSD stepping stone: Western Digital buys sTec

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Western Digital is buying solid-state drive (SSD) maker sTec for US$340 million, looking to lead the SSD industry.

sTec was one of the pioneers in the SSD space, but quickly lost its lead to other drive manufacturers. It also ran into trouble in 2012 after an insider trading scandal resulted in the loss of its co-founder and CEO, and plunging shares values.

WD, traditionally a hard disk drive (HDD) company, is looking to accelerate its transition to SSDs, which are more reliable, faster and energy efficient. Buying sTec will give this initiative a boost.

“Solid state storage in the enterprise will play an increasingly strategic role in the future of Western Digital,” said Steve Milligan, president and chief executive officer, Western Digital Corporation. “This acquisition is one more building block in our strategy to capitalize on the dramatic changes within the storage industry by investing in SSDs and other high-growth storage products.”

It will make the purchase through subsidiary HGST, which is currently in a joint development program with Intel for enterprise SSDs. The intention is to integrate sTec engineering talent and IP into HGST.

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