Seagate is acquiring Samsung’s M8 product line of 2.5-inch high capacity hard drives and will supply disk drives to Samsung for PCs, notebooks and consumer devices. Samsung will supply Seagate with chips for enterprise solidstate drives (SSDs). Seagate already uses those chips for its SSD and hybrid drives. Seagate is also acquiring employees from Samsung’s Korea design center.

The deal was first disclosed in April, but the companies had to clear regulatory hurdles. Even with the close of the deal, Seagate and Samsung face a long transition. Seagate will retain the Samsung brand for some of its hard drives for a year, and establish independent sales, product and development operations during that period.

The other blockbuster hard drive deal in the works is Western Digital’s proposed $4.3 billion takeover of Hitachi Global Storage Technology (HGST). The European Union last month gave its blessing to that deal, but ordered Western Digital to sell off some assets. The Western Digital-HGST acquisition is expected to close next March, one year after it was first announced.

Samsung sells hard drives for PCs and consumer electronics, so the SSD part of the deal is the key piece for enterprises.

“This provides Seagate with an important source of leading-edge NAND supply and early visibility into the next-generation of NAND,” Seagate CEO Steve Luczo said on a conference call to discuss the deal.

Seagate and Samsung announced a NAND partnership last August. Seagate launched its first enterprise SSDs in March with its Pulsar .2 mult-layer cell (MLC) and Pulsar XT.2 single-level cell (SLC) SSD using Samsung NAND chips. Seagate was slow entering the SSD market, but Luczo said those Pulsar products should be coming into the market through storage system OEM partners soon and Seagate is on schedule for its next generation of SSDs in partnership with Samsung. Still, Seagate’s OEM customers wanted assurances that the Seagate-Samsung arrangement would remain intact.

“This addresses an issue that customers have raised,” he said. “While they have a lot of confidence for Samsung and Seagate to design flash products, there always has been a bit of a concern that without a formal supply agreement, what was the whole package going to look like?”

Seagate also sells hybrid systems with SSDs and hard drives.

The Samsung deal, which Seagate expects to close around the end of the year, is the second major disk drive merger in barely a month. Western Digital said in March it intends to buy disk drive rival Hitachi Global Storage Technologies (HGST) for $4.3 billion.

Luczo said the consolidation reflects the growth of storage capacity worldwide and the need for investment in new storage technologies.

“Demand for storage is accelerating,” he said. “Petabyte growth is very strong and has been for the last six to eight quarters, even in an economy that has been lackluster.”