SEAGATE TECHNOLOGY LLC

Seagate Technology knows that if you want to survive in the storage market, you'd better have drive. The company is the leading independent maker of hard disk drives (HDDs) used to store data in computers. Its drives are used in systems ranging from personal computers and consumer electronics to high-end servers and mainframes. The company also makes solid-state drives (SSDs). Seagate sells directly to computer manufacturers and through distributors. About 70% of sales are to manufacturers, which include Hewlett-Packard, Dell, EMC, IBM, and Sun Microsystems; distributors and retailers account for the rest. Seagate generates around three-quarters of its sales outside the US.

Seagate still enjoys a hefty share of the market for HDDs as demand for electronic data storage continues. In an industry that sees constantly falling PC prices, Seagate manages to stay at the front of the disk drive market by significantly undercutting competitors' prices, instituting global layoffs, and consolidating facilities. Fiscal 2009 was a rough year due to the global economic recession; sales dropped by about 23% and the company went into the red for the first time in eight years. Seagate bounced back in 2010, however; revenue increased 16% and the company recorded $1.6 billion in profit. That year the company shipped 193 million drives, an increase of 18%.

HDDs are facing stiff competition from SSDs, which use NAND flash memory. SSDs are faster, quieter, use less energy, and are more durable than HDDs, but since they're new, they're still a lot more expensive than hard drives. Not to be outdone, Seagate teamed up with Samsung Electronics to jointly develop and cross-license enterprise-class SSDs. Seagate debuted its first SSD, called Pulsar, in late 2009. Key players in the SSD industry include IntelSTEC, and Western Digital.

In 2011 Seagate bought Samsung's disk drive business in a transaction valued at around $1.4 billion in cash and stock. Samsung gets a nearly 10% stake in the company and a place on its board. The deal will also see the two companies collaborate again, with Seagate producing disk drives for Samsung and Samsung providing flash memory chips for the storage devices. With the acquisition, Seagate is looking to bolster its SSD business and stay competitive in a storage market where demand for SSDs -- used in tablets and smartphones -- is outstripping demand for traditional HDDs. The company is also losing market share to Western Digital, which is in the process of buying Hitachi's storage unit.

In 2012 Seagate increased its stake in France-based storage drive maker LaCie to 95% and was moving forward with plans to buy the remaining shares. The purchase bolsters the company's consumer storage growth opportunities, especially in Europe and Japan, as well as strengthens its R&D and adds important retailer relationships.

Seagate has had a history of going public and being taken private. Investment firms Silver Lake Partners and Texas Pacific Group took Seagate private in 2000 and the company returned to the public market two years later. Again in 2010 the company considered a going-private transaction. (Currently, BlackRockFMR, and Wellington Capital Management collectively control 28% of the company's stock, but the potential buyers were not disclosed). Seagate called off the discussions six weeks later after the board felt the offer undervalued the company. It then decided on a $2 billion stock repurchase to increase the value of its shares.

The company has manufacturing plants in China, Malaysia, Minnesota, Northern Ireland, Singapore, and Thailand. The US and Ireland plants produce recording heads; drives, drive subassemblies, and substrates are made in Asia. Its five product development facilities are located in California, Colorado, Minnesota, Massachusetts, and Singapore.
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SEAGATE TECHNOLOGY LLC


10200 S De Anza Blvd
Cupertino, CA 95014-3029
Phone: 1 (408) 658-1000
Fax: 1 (831) 4383320
www.seagate.com

STATS


  • Employer Type: Unknown
  • Pres & Gen Mgr-i365: Terry Cunningham
  • Pres & Ceo; Chief Technology Officer; Eo-chm-pres: Stephen Luczo
  • Chief Operating Officer: Bruce Polson

Major Office Locations

  • Cupertino, CA

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