It would not be WD's first foray into that market.
In 2013, WD collaborated with SanDisk to bring its its first solid-state hybrid drive (SSHD) or "hybrid drive" to market. The WD Black SSHD combined up to 500GB of spinning disk drive capacity with 8GB to 24GB of NAND flash memory from SanDisk.
But hybrid drives have had slow uptake. Sales are only expected to reach $25 million by 2016. Meanwhile, NAND flash and SSD sales are skyrocketing.
NAND Flash demand worldwide is projected to expand from 30% of the overall market in 2015 to 35% in 2016, according to market research firm TrendForce.
In the wider SSD market, the enterprise segment is seeing strong growth due to a sharp decline in overall SSD costs and developments in cloud computing applications. For the PC market, SSD penetration in notebooks is estimated to rise substantially from 26% in 2015 to 36% in 2016 as vendors follow Apple's lead in furnishing their laptops with SSDs.
All companies with key technologies related to SSD production have been the takeover targets for larger storage solution providers like WD and NAND flash memory suppliers in recent years, according to DRAMeXchange's assistant vice president, Sean Yang.
"This latest deal is a win-win for both sides," he said. "For WD, the rise of the SSD market has accelerated the development of related storage equipment. WD's acquisition targets in the past three years were all developers of core technologies related to NAND flash memory."
WD's success in acquiring SanDisk is crucial to its plan to dominate the SSD market -- the lynchpin to its strategy.
Objective Analysis' Handy pointed to Intel as an example of just how hot the SSD market is. Intel on Wednesday announced it would get back into the NAND flash production game by converting its fabrication facility in Dalian, China, from making processor chips to making 3D-NAND flash chips.
Intel also plans to invest up to $5.5 billion in its 3D NAND project. The Dalian fab plant is scheduled to begin producing memory chips in the second half of 2016.
Since 2006, Intel and Micron's joint venture -- IM Flash Technologies -- has been developing and manufacturing flash memory chips. The companies have opened at least two fabrication facilities, one in Lehi, Utah, the other in Singapore.
Intel, however, is a 49% stakeholder in the venture, with Micron owning the fabrication facilities, Handy said. So opening its own facility puts it back in control of production and addresses a dearth of NAND in China.
The latest data from TrendForce shows that China is set to consume $6.67 billion worth of NAND flash in 2015, accounting for 29.1% of the industry's revenue this year. The country is also projected to consume a third of the global NAND flash demand in 2016, representing a giant leap in growth.
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