Samsung, SK hynix unlikely to bid for SanDisk

By Kim Yoo-chul

Samsung Electronics and SK hynix are unlikely to move to take over SanDisk of the United States because they see no synergy in acquiring the data storage maker, sources said Wednesday.

There were rumors that Samsung Electronics would be a suitor for SanDisk.

“Samsung is unlikely to acquire the U.S.-based data storage products maker as it has already as many competitive patent portfolios and technologies as SanDisk has,” said the sources. “There may not be much to gain from the deal.”

Samsung is already the world's top supplier of NAND flash memory chips and NAND-based solid-state drives, the next-generation storage device, with the drives being used in corporate data centers and premium electronic devices such as notebooks.

Samsung said it did not comment on market rumors.

Mark C. Newman, at Bernstein Research, said in a recent report that given the continued dismal performance and lower level of stock prices, SanDisk presented an excellent takeover candidate.

As the demand for NAND flash memory chips is growing, thanks to the need for corporate and consumer SSDs, the research firm named Samsung Electronics, SK hynix, Micron Technology and Western Digital as possibly being interested.

SanDisk shares have slipped nearly 32 percent this year as the world leader in flash storage products supply reported a string of issues.

Newman said SanDisk was best positioned in the enterprise NAND market for applications such as cloud computing, data centers and networking systems.

Another source who is involved in the issue said SK hynix was unlikely to show interest in buying SanDisk as it was on track to improve its competiveness in the NAND chip market.

SK hynix declined to comment.

“Samsung and SK hynix are well positioned to respond with the demand for SSD products,” the sources said. “SanDisk may be attractive to memory chip makers who want to shift their focus towards SSD from conventional hard-disk drives with no big bottleneck in NAND chip sourcing.”

Western Digital has a stronger interest in SanDisk.

SanDisk’s NAND chips are also used in smartphones and other mobile devices and it has a joint venture with Japan's Toshiba to make NAND products. SK hynix is collaborating with Toshiba to develop the next memory chips.

Samsung made an unsuccessful hostile bid, worth $5.85 billion, for SanDisk in 2008.