WD sells Sarawak fab to Hitachi

Western Digital Corp. (NYSE: WDC) today announced that it has agreed to sell the assets of its media substrate manufacturing facility in Sarawak, Malaysia, to a subsidiary of Hitachi Global Storage Technologies, the hard drive manufacturing unit of Hitachi, Ltd. The employees of WD at the facility will become employees of the purchaser. The transaction is expected to close in the current quarter, subject to customary closing conditions. Terms of the transaction were not disclosed.

WD announced in December that it was taking actions to realign its cost structure to match a softer demand environment. This divestiture is one of those steps. The Sarawak facility, at which WD manufactured aluminum substrates for hard drive magnetic media, was acquired by WD as part of its acquisition of Komag, Inc. in September 2007. WD is consolidating substrate operations from the Sarawak facility into its other substrate facility in Johor, Malaysia. WD will continue to manufacture the majority of its magnetic media requirements at existing facilities in Malaysia and source the balance of its media needs through its strategic external partners.

“We are very pleased that, rather than closing this plant, which was surplus to our needs, we have identified a qualified buyer who will continue to operate the facility,” said John Coyne, president and chief executive officer of WD. “WD worked closely with Hitachi GST, the government of Sarawak and its local agencies to create a solution that preserves operations at the Kuching location, as well as the jobs of the employees and those in supporting industries, which have a large impact on the local community.”