NTN Corp. (Japan; TSE: 5251R9N7) and Nidec Corp. (Japan; 6594:JP) have agreed to end their joint venture arrangement which manufactures electric motors for computer hard disk drives using fluid dynamic bearings.

Several years ago, fluid dynamic (or hydrodynamic) bearings began to take over the market from miniature ball bearings in computer hard disk drive motors. In 2001, NTN and Nidec agreed to leverage their respective strengths to tackle that new market; NTN contributed its expertise in sintered hydrodynamic bearings, and Nidec contributed its market-leading electric motor construction.
Fluid dynamic bearings have several major advantages, beyond cost, over miniature precision ball bearings in the computer hard disk drive motor application: they are more stable, last longer, allow higher rotational speeds, lower operating temperature, lower power consumption, improve stability, and eliminate the harmonic vibration issues.
The venture's original plan was to build a factory in the Philippines, but that was later abandoned in favor of building a plant in China, NTN-Nidec Zhejiang.
In 2005, the companies eventually built a second factory, in Thailand (NTN-Nidec Thailand).
Both the plant in Zhejiang and the one in Thailand were 60% owned by NTN and 40% by Nidec. NTN had invested USD $21 million in China, and $18 million in Thailand; Nidec will pay an undisclosed sum for both.

NTN said splitting up the joint ventures makes sense in the new climate for hydrodynamic bearings. Selling its interest to Nidec will not only allow it to improve profitability but also return focus to its own areas of expertise with sintered fluid dynamic bearings. Nidec, in turn, take over FDB manufacturing in China and Thailand, and better synchronize bearing output with its own electric motor production.

NTN and Nidec will maintain a relationship producing FDB motors, but NTN step back -- providing Nidec with a licensing agreement under which NTN will provide its expertise and continue to supply any other FDB components Nidec may need. Nidec currently has a commanding 75% market share in computer disk drive motors.

Going forward, NTN said the separation will also allow it to more aggressively pursue research and development opportunities for new fluid dynamic bearing markets and applications.