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Disk Drive Supply Chain Healthy & Holding

The last year and a half has been challenging for the global hard disk drive (HDD) supply chain.

After the disastrous 2011 Thailand floods that wreaked havoc by wiping out much of the extended HDD and storage manufacturing supply chain, availability, hence pricing, was volatile, as discussed in the EBN community in Residual Effects Abound From Thai Flooding and Slow Motion Recovery Follows Thai Floods. During the last half of 2012, the disk drive market finally emerged from these negative events, and stability has taken hold.

Healthy competition helps Some critical events occurred during 2H12, just as the disk drive supply chain was in its final recovery stages. Namely, significant shifts occurred among the major HDD suppliers; Toshiba brought the first of the 3.5-inch hard drive product lines into full production for the consumer and commercial desktop markets. Toshiba's entry into this market sector was the result of the US's Federal Trade Commission (FTC) ruling on Western Digital's (WD) asset holdings.

The ruling stems from WD's “proposed acquisition of rival Hitachi Global Storage Technologies Ltd. [that] would likely have harmed competition in the market for desktop hard disk drives used in personal computers,” according to the FTC. Had WD been allowed to hold the Hitachi assets, the global market for desktop HDDs would have been held by WD and Seagate alone, obviously impeding healthy competition, fair pricing, and innovation.

What goes around... looks to hold steady in 2013, as the  disk drive market sees consistent demand.

What goes around… looks to hold steady in 2013, as the
disk drive market sees consistent demand.

Toshiba's market opportunity was realized almost a half-year after the ruling, in late 2012, when its powerful DT01ACA series entered the market for consumers and commercial desktops. Adding flexibility, 7200 RPM performance, 16 percent reduced idle power consumption, up to 3TB capacity, among other best-in-class features, this new line of Toshiba desktop HDDs keeps the competitive edge real as SSDs continue to put pressure on the HDD market.

Disk drive advantages Currently, there are opportunities and threats facing the HDD market due to wider market pressures that are facing desktop and laptop computers more generally. SSDs are forecasted to rise in 2013 due to continued NAND price declines and increased consumer interest in SSDs or hybrids, as IHS reported. Despite the continued, and rising, challenges from SSDs, HDDs will remain the standard, although forecasted revenue will be flat then decline over the next few years into 2016. Due to HDD's continued price advantages over SSDs, the HDD market is holding steady, particularly with increased Ultrabook competition to meet price-conscious consumer demand.

Enterprise opportunities are increasing for disk drives, and herein lies the importance of the FTC's ruling. Both Seagate and WD are competing for the top spot in the HDD supplier arena. Meanwhile Toshiba's new HDD line offers competition for enterprises, as the IHS data show. This competition should help the disk drive storage market hold steady for the next few years, due in large part to HDD cost advantages for enterprises.

These cost advantages are an important variable as enterprises struggle to meet the demand for increased storage solutions to handle the growing big-data analytics and database needs while watching their bottom line.

1 comment on “Disk Drive Supply Chain Healthy & Holding

  1. Brian Fuller
    March 7, 2013

    It's amazing to me that the HDD industry has been counted out (vis a vis solid-state storage competition) but three decades and it just continues to improve its technology and cost points relentlessly. 

    Healthy and holding indeed!

    Thanks, Megan!

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