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Western Digital just bought its way into Apple’s iPhone supply chain for $19B

Published Oct 21st, 2015 2:18PM EDT
Western Digital SanDisk iPhone

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How important is Apple’s iPhone supply business? Just ask Intel, a company that might have tried to win Apple orders for certain chips for years, and it’s now rumored to have an iPhone 7 chip in the works. Also, check out Samsung’s most recent earnings report that says it’s the semiconductor business, bolstered by Apple, which helped Samsung return to growth, not the mobile division that makes Galaxy phones.

Now, it looks like Western Digital’s massive $19 billion acquisition of SanDisk might help the storage device maker win some of Apple’s future iPhone orders.

DON’T MISS: I wish the iPhone had copied HTC instead

According to reports from late June, SanDisk won 20% of Apple’s iPhone 6 business last year, being the third flash storage provider after Toshiba (50%) and SK Hynix (30%). SanDisk also provides memory chips for iPads and Macs. It’s not clear, however, whether SanDisk makes any flash storage for the new iPhone 6s or 6s Plus, and teardowns have failed to name SanDisk as one of the memory providers for the 6s series.

A Bloomberg report from early May said that SanDisk may be one of the biggest losers from a new “Apple-Samsung love affair,” as the storage company in mid-April released a forecast that fell short of analyst estimates. SanDisk at the time said that lower prices, product delays and the loss of customers might be responsible for that. Apple was believed to be one of those customers when it comes to flash drives used in the newer Macs. Apple is one of SanDisk’s largest customers, contributing 19% of SanDisk’s revenue.

Aside from providing flash storage and hard drives to various device makers, SanDisk also makes appealing microSD cards and USB storage solutions that can better serve the storage needs of Android (and even iPhone) users. These are also new products that Western Digital might be interested in, especially considering the recent product advancements from SanDisk that paint an interesting picture of mobile storage for next-gen devices.

Western Digital confirmed the acquisition on Wednesday. The deal is all the more interesting considering that SanDisk has also partnered with Toshiba in the past, and that relationship will not be hindered by Western Digital’s purchase of SanDisk. Toshiba is also an important player when it comes to supplying memory for Apple products. In fact, the two companies may already have storage solutions in the works for the upcoming iPhone 7.

Western Digital did not mention anything about its plans for SanDisk, but did stress that SanDisk’s flash memory expertise is an area of interest for the company.

“The combination is the next step in the transformation of Western Digital into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory (NVM),” the company wrote in its press release announcing the deal. “With this transaction, Western Digital will double its addressable market and expand its participation in higher-growth segments. SanDisk brings a 27-year history of innovation and expertise in NVM, systems solutions and manufacturing. The combination also enables Western Digital to vertically integrate into NAND, securing long-term access to solid state technology at lower cost.”

Chris Smith Senior Writer

Chris Smith has been covering consumer electronics ever since the iPhone revolutionized the industry in 2008. When he’s not writing about the most recent tech news for BGR, he brings his entertainment expertise to Marvel’s Cinematic Universe and other blockbuster franchises.

Outside of work, you’ll catch him streaming almost every new movie and TV show release as soon as it's available.