Fujitsu Ltd. said on Feb. 17 it would transfer its struggling hard disk drive business to rival Toshiba Corp., a deal that will push it deeper into loss this year than previously expected.
Fujitsu said it would spin off its HDD business into a new firm, which Toshiba will turn into a subsidiary with a stake of 80%. Fujitsu will hold 20%. The company had already announced in late January that it would stop production of HDD heads.
The transfer "will enable Toshiba to reinforce its already strong position as a leading vendor of small form factor HDDs, widely used in notebook PCs, mobile devices, automotive and consumer electronics," the statement said.
Fujitsu is struggling amid a global downturn due to a slump in demand for chips and electronic devices. Fujitsu forecast a net loss of 50 billion yen (US$555 million) for the year to March, more than double the 20 billion yen loss it had estimated last month, due to the divestment of the HDD business.
The company left unchanged its forecasts for operating profit of 50 billion yen and revenue at 4.7 trillion yen.
Copyright Agence France-Presse, 2009
