Hitachi to rebuild HDD unit

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Hitachi Ltd will rebuild the struggling hard disk drive unit in the United States without support from other parties, Hitachi officials said Thursday. The Hitachi group has terminated its negotiations on a possible sale of some shares in the U.S. unit, Hitachi Global Storage Technologies Inc, to a U.S. investment fund.

The Hitachi group has now decided to rebuild the HDD unit on its own, Hitachi Global Storage Chairman and Chief Executive Officer Hiroaki Nakanishi told a briefing for investors on the group’s HDD operations.

Hitachi established Hitachi Global Storage in 2003 by combining its own HDD operations with those acquired from U.S. computer giant International Business Machines Corp.

The Japanese electronics group was pursuing external capital to speed up the rehabilitation of Hitachi Global Storage and discussing with U.S. fund Silver Lake Partners on the partial sale of the HDD firm.

But Hitachi and Silver Lake failed to agree on the valuation of the company and the share price. In addition, the HDD unit turned profitable in late 2007 and is now on course to achieving a full-year operating profit in 2008. These led Hitachi to cancel the share sale plan.