HDD Decline Expected To Slow And Reverse

Posted: Feb 10 2014, 2:35am CST | by , Updated: Feb 10 2014, 2:37am CST, in News | Technology News

HDD Decline Expected To Slow and Reverse
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There is just too much information to store to keep a good storage technology down. After two straight years of declining shipments, 2014 looks like it could be the year that HDD shipments bottom out and perhaps even increase over the prior year. In the just released Digital Storage Technology Newsletter put out by Coughlin Associates (www.tomcoughlin.com) calendar Q4 2013 and 2013 HDD shipments are laid out with projections for 2014 and beyond. The newsletter is edited by Tom Coughlin. Following are some observations from the newsletter.

  • Total HDD shipments in CQ4 2013 were up about 1.8% from the previous quarter (140.2 M units).
  • Notebook HDD shipments were down 2.0% while desktop HDD shipments were up 1.1%.
  • Consumer Electronics HDD shipments were up 6.9% while branded shipments were up 12.8%.
  • High performance enterprise storage was down 2.3% while enterprise nearline and capacity HDDs showed growth at 0.6% quarter to quarter (slightly higher growth than the prior quarter).
  • 1.8-inch HDDs were flat from the prior quarter (flat with CQ1) while 3.5-inch HDDs increased by 4.9%. 2.5-inch HDDs declined by about 1.3%.
  • The growth in 3.5-inch drives with the decline in 2.5-inch drives is reversing the long-term trend towards smaller form factor HDDs. This change will likely continue until and if there is a recovery in mobile computers with HDDs.
  • Total HDD shipments in 2013 were 552 M units, down about 4.3% from 2012.
  • Comparing 2013 to 2012 Traditional Enterprise HDDs declined 21.1%, Nearline and Capacity Enterprise increased by 47.5%. Desktop drives declined 7.4%, CE gained by 10.6% and notebook HDDs declined by 15.6%.
  • WD projected a March quarter (CQ1 2014) TAM of 131-135 M units while Seagate had a wiser range with a TAM estimate of 130-145 M units. Our estimate for total HDDs shipped in 2014 is 544 M units.
  • HDD prices were up slightly, about 0.9%, in CQ4 2013 vs. CQ3 2013. HDD prices are still significantly above where they were before the late 2011 floods despite reduced shipments, indicating that HDD companies are keeping good control of their inventories and thus their ASPs.
  • There are major moves to producing hybrid HDDs with some flash memory in the HDD by all three HDD companies: Western Digital, Seagate and Toshiba. In 2013 Seagate announced they have shipped over 1 M hybrid HDDs. The latest generation of SSHDD products include up to 16 GB of flash memory, but future products could have over >20 GB of flash memory on board.
  • HGST, a WD company, announced that they were shipping a 6 TB 7-disk sealed HDD filled with He for near-line or cold storage applications.
  • Seagate and the other HDD companies are shipping shingled magnetic recording (SMR) hard disk drives which could provide even higher storage capacities in 2014.
  • We believe that a projected decline of about 1.5% in 2014 appears likely and it is even possible that there could be positive growth in 2014.
  • There is an opportunity for positive growth in HDD shipments in 2015 and 2016 if trends for nearline and capacity enterprise and branded product HDDs show similar growth trends to 2013 and if PC HDD sales stabilize. We are currently projecting YoY 3.6% unit shipment growth in 2015.

The big drivers of HDD storage are cloud storage (nearline and capacity enterprise HDDs) branded products and consumer electronics. If computer sales stabilize, which appears likely, HDDs for computers may also stabilize, resulting in HDD growth starting at least by 2015. A good part of expected total stored capacity growth of at least 30% yearly will likely be storage on HDDs and with data center storage efficiency improvements approaching saturation, total HDD demand should increase assuming that these products can remain competitive on a $/TB basis.

Source: Forbes

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