Western Digital is making its first foray into the Solid State Disk market with its $65 million acquisition of SiliconSystems.

As it enters the solid-state hard drive market, Western Digital Corp. Monday, completed the acquisition of SiliconSystems Inc.

WD announced a $65 million cash acquisition of SiliconSystems, Inc., Aliso Viejo, Calif., a leading supplier of solid-state drives for the embedded systems market. The deal takes effect almost immediately and will set the new division towards producing solid-state drives (SSDs) for its parent.

Privately held SiliconSystems makes drives that use flash memory chips for storing data on corporate networks. It was founded in 2002 and makes 2.5-inch and 1.8-inch drives with SATA, EIDE, PC Card, USB and CompactFlash interfaces.

We are delighted to have the SiliconSystems team join WD, said John Coyne, president and CEO of WD. The combination will be modestly accretive to revenue and margins as a result of SiliconSystems' existing position as a trusted supplier to the well-established $400 million market for embedded solid-state drives.

The $65 million cash deal brings the Aliso Viejo, Calif.-based solid-state drive maker into Western Digital and will be known as the WD Solid-State Storage business unit. Western Digital will also gain access to SiliconSystems library of intellectual properties, the company said.

SiliconSystems' intellectual property and technical expertise will significantly accelerate WD's solid-state drive development programs for the netbook, client and enterprise markets, providing greater choice for our customers to satisfy all their storage requirements. Coyne added

In 2008, an estimation of solid-state drive market is up to $1.1 billion. The acquisition puts Western Digital ahead of Seagate in a new market.

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