Hitachi Ltd. and International Business Machines Corp. said Wednesday they have agreed to form a strategic alliance in the field of storage technologies and will set up a joint venture to integrate their hard disk drive operations.
The high-tech giants are planning a multiyear alliance to research and develop new open standard-based technologies for next-generation storage networks.
The firms also said the HDD joint venture will feature combined research, development and manufacturing operations, as well as related sales and marketing teams.
The new venture, with its headquarters in San Jose, Calif., will be owned 70 percent by Hitachi and 30 percent by IBM. The two companies have yet to decide on the new firm's capitalization figure.
Combining the HDD operations of Hitachi and IBM, the new firm's sales will reach 500 billion yen to 600 billion yen, making it the second largest of its kind in the world, company officials said.
The two firms plan to establish the venture this year, they said.
The integration sets the stage for the companies to compete with the world's leading manufacturer of storage equipment, EMC Corp. of the United States.
Hitachi will dispatch top managers to the new firm, whose workforce is expected to be around 24,000.
"Strong hardware is essential to our companywide efforts to enhance solutions operations," said Yoshiro Kuwata, executive vice president of Hitachi.
Nicholas Donofrio, senior vice president of IBM, said, "Our two companies believe that the evolving nature of the storage industry is creating tremendous opportunity."