History (1992): Seagate to Take 25% Equity in Flash Maker Sundisk

Seagate Technology (Scotts Valley, CA) and Sundisk Corp. (Santa Clara, CA) have signed a letter of intent to form a product and technology development alliance on the design, manufacturing, marketing and sales of solid-state mass storage products.

Seagate is to make a financial investment – reported at around $20 million by the US press – on Sundisk, representing a 25% equity position.

Al Shugart, Seagate’s chairman, president and CEO, will fill a newly-created seat on the Sundisk board of directors.

The HDD manufacturers seem interested in flash cards. Conner Peripherals and Intel have a joint product and technology development contract since the beginning of the year, but it hasn’t lead to any kind of product.

As a matter of fact, Seagate isn’t expecting extraordinary results in a short term from this agreement. It could be a memory formed by a flash card and a magnetic HDD.

“The flash memory business is still not a big market, but it’s getting bigger,” said Shugart. “It will be very complementary to disk drives because it’s a plug-in market. We’ve announced a 1.8-inch plug-in disk drive, that market won’t be very big either for a while, but at some point and time, both flash cards and plug-in disk drives will have a big market. I don’t think there will ever be a competition. The smallest capacity disk drive will always be the cheapest device if you want that much memory, but if you want less memory or if you need the ruggedness, then you would get a flash card.”

“I don’t know when the deal with Sundisk will be completed. We will try to do it within a few weeks. There are no disagreements. We don’t know how to write some of the cooperative efforts,” he added.

Sundisk was founded in 1988 by its actual president and CEO, Dr. Eli Harari, a pioneer in non volatile and semiconductor systems design. He was a co-founder, president and CEO of Wafer Scale Integration.

The VP marketing of the Californian firm is John Reimer, who was the founder and first chairman of the PCMCIA Association when he was with Fujitsu.

Sundisk’s charter is to develop solid-state mass storage solutions. Its products are based on proprietary flash EEPROM technology. The actual 8Mbflash chips sales utilize patented cell on an .8 micron process. 16Mb densities are expected in 1993 and 64Mb in the next few years.

The IDE series in 2.5-inch form factor, and SDI series, in 1.8-inch form factor, and the SDP series, are compliant with the PCMCIA standards, using 8Mb flash cards with a capacity from 2.5 to 40MB.

For example, the SDP-20 20MB solid-state drive is list priced at $1,499, with Stac Electronics’ compression software to double this kind of cooperative effort.

The privately-held company has raised over $27 million in venture capital from venture enterprises including Concord Partners, U.S. Venture Partners, Oak Ventures, the Maydent Group and Matrix Partners.

The Californian firm employs 100 engineers, scientists, and sales/marketing professionals.

It has developed technology relationships with AT & T Bell Laboratories and Matsushita Electronics Corp.

He had OEM agreements, mainly with IBM and Tandy/Grid.

In its first year of product sales, Sundisk sold $20 million worth of solid-storage devices, and is supported by mobile products including Tandy/Grid’s and Convertible, IBM’s Thinkpad 700T, HP’s 95LX, NCR’s 3170, Fujitsu’s Poqetpad, AT & T’s Safari, and Sharp’s PC-3000 and PC-6781.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠59, published on December 1992.

Note: Seagate missed to acquire SanDisk, formerly Sundisk. In October 2015, Western Digital got it for $16 billion.