Disk maker Western Digital, the one not yet making a 1TB disk yet (Seagate, Hitachi GST and Samsung all are) has bought a disk media manufacturing company, Komag.
This is unexpected. Western Digital, unlike Seagate, is not vertically-integrated, buying disk drive bits from suppliers rather than making them itself. Now it has bought Komag for a whopping $1 billion and will make its own disk platter media.
Western Digital had bought a read/write head company in 2003 but that was thought to be a one-off and not part of a strategy. Perhaps by vertically integrating its manufacturing Western Digital will be better able to keep up with competitors and not lag behind, as it is doing, with large capacity 3.5-inch disk drives.
Samsung, Toshiba, and Fujitsu are not vertically integrated and remain reliant on third-party component suppliers.
The Komag purchase should mean that large capacity drives in all form-factors (1.8-inch, 2-inch, 3.5-inch) should cost less because of more competition between suppliers. Don Renouard at Baird supports this view: " Longer term, WDC will become a more formidable opponent as vertical integration will reduce costs and allow it to compete on better footing with Seagate on price."
It should also mean Hitachi GST will have to get some of its drive platters from another supplier; it currently buys additional platters from from Komag when internal supplies run short..
According to Renouard, Seagate also tops up its platter supplies from Komag when necessary. Both Hitachi GST and Seagate should transition to other suppliers such as Showa Denko, Fuji, and Hoya.