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Politics : Formerly About Applied Materials

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To: StanX Long who wrote (64178)	6/4/2002 2:48:05 AM
From: StanX Long	Read Replies (2) of 70976

Hitachi to Pay $2.1 Bln for IBM Disk-Drive Unit (Update1) By Keiko Kambara quote.bloomberg.com Tokyo, June 4 (Bloomberg) -- Hitachi Ltd. will pay $2.05 billion for International Business Machines Corp.'s hard-disk drive business, creating a company with a one-fifth market share as falling demand forces rivals to link up to cut costs. Japan's No. 3 chipmaker and the world's largest computer maker will initially create a new company. IBM will reduce its 30 percent stake in the venture over three years and then focus on data-storage systems and software, spokesman Scott Brooks said. Hitachi's shares fell as much as 4 percent on concern it won't pare costs enough to compete against Maxtor Corp. and Veritas Software Corp., even as it challenges their leadership of the $20 billion market. Hitachi's rivals are also consolidating with Maxtor buying Quantum Corp.'s disk-drive business in April last year and Veritas acquiring Seagate Technology Inc. in November 2000. ``The profitability of any hardware business is under pressure'' because prices keep falling, said Sadaji Shibata, who helps manage about $60 billion in assets at Daiwa Asset Management Co. ``Hitachi should differentiate its devices but it's hard to see how it can do that.''

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