In a deal that shows the value of vertical integration, Bloomberg reports that the acquisition talks between Flash memory maker SanDisk and storage device company Western Digital have accelerated over the weekend. Last week, Bloomberg had reported that both Micron and Western Digital were in talks to buy SanDisk.
The proposed deal—Western Digital would acquire SanDisk—fits within the overall consolidation in the semiconductor industry as well as the consolidation happening in the enterprise computing world with Dell paying $67 billion to buy EMC. SanDisk (SNDK) makes flash memory modules and chips for everything from your phones to large enterprise storage arrays. It has spent the last few years buying up software expertise to overlay on top of its hardware, especially to appeal to big corporate customers trying to speed up their access to the increasing amounts of data they are trying parse.
Western Digital declined to comment on this story. SanDisk has not responded to requests for comment.
Western Digital (WDC), has followed a similar path, trying to evolve from a company that has made hard drives, which are an old-school technology, to solid-state drives favored by the younger, hyperscale data center customers that want flash memory in all of their boxes. That same desire for SSDs has moved to the more tradition corporate customer and PCs, and it makes sense that Western Digital would want to own the underlying silicon technology behind flash memory. It would also get some impressive IP for shuttling data around data centers quickly.
As the customer base for both consumer electronics and for servers gets smaller it makes sense that the suppliers that serve them will seek to consolidate. If Western Digital’s efforts fall through, we’ll likely see other efforts from another vendor.
For more on the EMC and Dell deal, check out the following Fortune video:
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