Seagate's executives say that the company is on track to begins shippments of 18-terabyte ahrd disk drives in the first half of the calendar year 2020, and to release the first commercially available HAMR drives in late calendar 2020 at the 20-terabyte capacity point.
During the company's conference call, Seagate said it continued to ramp its 16-terabyte production and that it was preparing to launch its 18-terabyte drives, which are based on the same platform, simplifying the manufacturing and qualification processes. The company's expects to align its production to meet customers' demand.
In the December quarter, Seagate grew revenue to $2.7 billion and drove strong double-digit profit growth on a sequential basis, with both non-GAAP operating margin and non-GAAP EPS coming in at the upper end of the company's guided ranges. Seagate generated nearly $1.2 billion in free cash flow over the past 12 months. In addition, Seagate said it achieved record exabyte shipments in the December quarter, supported by strong demand for mass capacity storage and the successful ramp of its 16-terabyte products. Seagate said it shipped 1 million 16-terabyte drives during the quarter to support strong customer demand.
Seagate's December quarter results highlight the increasing demand for mass capacity storage, which includes nearline, video and image applications and Network Attached Storage or NAS.
Seagate's Mass Capacity Storage, which includes Nearline, video and image application and NAS drives represented 49% of total December quarter revenue, up from 47% in the prior quarter, and 39% in the prior year. Revenue from the segment increased 9% quarter-over-quarter and 25% year-over-year driven by growth across each of these markets.
Revenue from 16-terabyte drives nearly tripled quarter-over-quarter, making them Seagate's highest revenue product during the quarter.
Seagate's 8% of the December quarter revenue was derived from its non-HDD business in which revenue increased 14% sequentially driven by growth in both systems and SSD.
Looking ahead to Seagate's outlook for the March quarter, as the Coronavirus outbreak continues, the company currently does not expect any material financial impact, but said that there is still "a lot of uncertainty" and therefore the company widend its revenue and EPS guidance ranges. Seagate expects revenue to be in the range of $2.7 billion plus or minus 7%.