The Japanese press is reporting that Hitachi is planning on dropping its miniature hard drives.
According to Nikkei, the company is to stop making the drives that are used in digital music players and video cameras.
It alleges that Hitachi has already stopped making 1-inch drives and will cease shipments of 1.8-inch HDDs next summer.
The newspaper pointed to manufacturers' preference for flash-based storage over spinning disks.
However, Nikkei continues that Hitachi will continue to build 2.5-inch and 3.5-inch drives for bigger devices such as PCs.
Hitachi recently announced that it now holds the record for the largest capacity 2.5 inch HDD device, boasting 500GB of memory and offering 5400RPM.
The Travelstar 5K500 will also come as a 400GB device and will use a 3Gb/s serial ATA to communicate with the computer (probably notebooks).
Asus has already announced that it is to build a laptop codenamed Asus M70, that will feature 1TB of storage, thanks to two Travelstar 5K500 drives.
However, the market for miniature HDD drives looks far less healthy.
Nikkei continues in its report that Fujitsu is also to turn its back on the 1.8-inch HDD business, despite making arrangements with US-based drive maker Cornice for co-production of the technology.
The newspaper suggests that Fujitsu is instead to concentrate on flash-based storage devices.
The articole also dropped the bombshell that Hitachi is considering selling just under half its hard drive business to US investment firm Silver Lake Partners.
Hitachi has kept quiet about the rumours of it ending some HDD production but has released a statement about the potential sale.
In this, it says it is "focusing on improving the performance" of its storage business — which has yet to make a profit since it was purchased from IBM in 2002 for about $2bn.
The company said it is "exploring every possibility" to do so, but "it is not a fact that Hitachi has decided to sell the hard disk drive business".