There are unconfirmed reports that Hitachi, Toshiba, and Fujitsu may be in talks to form a company dedicated to hard drive and storage technologies.

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The new company would combine the limping hard drive divisions of Hitachi and Toshiba as well as some of the storage systems technology from Fujitsu. Each would own a third.

The three-way deal is being proposed as an alternative to a private equity buyout. Hitachi has been in discussions with equity firm Silver Lake and others about spinning off its money-losing hard drive group, according to sources and news reports.

Hitachi was reportedly making a move out of the small hard disks business, an area that was increasingly getting dominated by flash memory-based solutions. Perhaps combining the best technologies from the three vendors could bring great innovation to the storage front.