Fujitsu puts 1.8-inch hard drive plans on hold

TOKYO, April 9 (Reuters) - Fujitsu Ltd. (6702.T: Quote, Profile, Research, Stock Buzz) said on Monday it has halted plans to make 1.8-inch hard drives as handheld device makers are more interested in flash drives for storage.

The Japanese chips-to-computers conglomerate had initially planned to begin production of 1.8-inch hard drives, used in ultra-portable notebooks and digital media players like Apple Inc.'s (AAPL.O: Quote, Profile, Research, Stock Buzz) iPod, in the first half of the current business year that began April 1.

But makers are now looking at flash memory drives as a lighter and faster - albeit more expensive - alternative to hard drives, which come with lengthy start-up times.

"We want to see if the market tips toward flash, or if it stays with hard drives," said Fujitsu spokesman Masao Sakamoto.

Falling prices for 2.5-inch hard drives have hurt profit margins at Fujitsu, which competes against industry leader Seagate Technology STX.N and Western Digital Corp. (WDC.N: Quote, Profile, Research, Stock Buzz).

Makers of smaller 1.8-inch hard drives include rivals like Toshiba Corp. (6502.T: Quote, Profile, Research, Stock Buzz) and Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research, Stock Buzz).

Fujitsu shares inched up 0.4 percent to 830 yen in morning trade, underperforming Tokyo's electrical machinery subindex , which rose 1.25 percent.

((Reporting by Mayumi Negishi; editing by Sophie Hardach; Reuters Messaging: mayumi.negishi.reuters.com@reuters.net; +81-3-3432-8618; mayumi.negishi@reuters.com)) Keywords: FUJITSU HDD/

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