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Sunday, June 08, 2014
HDD Market Seen To Post Modest Growth in 2014
Despite the worrying political situation in Thailand, the
country where most had disk drives (HDDs) are built,
indications from both HDD and automotive supply chains are
that it is "business as usual, while 2H '14 HDD build plans
semms to be aggressive.
Discussions centering on 5.25" form factor HDDs for
cloud/hyperscale/ enterprise continue through the supply
chain, but activity is primarily between HDD suppliers and
their customers, accoding to the latest TRENDFOCUS report.
Making larger HDDs is not a trivial pursuit, and the supply
chain is not expected to invest in a new form factor. HDD
companies interested in making a 5.25" drive may have to truly
'partner' with suppliers to help offset tooling/engineering
costs and to mitigate risk. Additionally, making larger HDDs
might open the possibility of selling "cold storage racks"
that are purpose-built for cold storage applications.
2H HDD builds looking a bit top-heavy, but reports from the
HDD supply chain indicate that the combined HDD production
schedule for the second half of 2014 is outstripping perceived
demand. While Trendfocus has forecast a mild uplift in
second-half HDD shipments, production plans are about 20
million units beyond the forecasted demand. As it typically
happens, builds can be inflated to extract price concessions
Trendfocus sees better than expected demand for HDDs for
Sony's Playstation for both in CQ2 and CQ3 before fading
seasonally in CQ4. Notebooks builds have also been stronger,
year on year.
The firm expects that CQ3 - being 14 week quarter for Seagate
and WDC - could be the high point in HDD shipments.
In summary, positive indicators today may result in
incremental shipments of 5 million to 7 million HDDs for the
year, which means the HDD market would post a Y/Y growth,
albeit a modest one.