Natural disasters in Thailand and Japan contributed to a rocky year for the HDD industry, but it is expected to bounce back in 2012.
Hard-disk drive unit
shipments worldwide experienced a year-over-year decline of 4.5 percent in
2011, due in part to massive and tragic natural disasters in Japan and Thailand,
according to a report from IDC. Although efforts to clean and repair flooded
factory buildings and equipment will take most of the first half of 2012, HDD
and HDD component production is expected to return to pre-flood output levels
in the second half of this year.
According to the IDC
forecast, the HDD industry will record year-over-year unit shipment growth of
7.7 percent in 2012 and a compound annual growth rate (CAGR) of 9.6 percent
from 2011 to 2016.
The report also noted that
due to the imbalance in supply and demand resulting from the Thailand floods,
HDD prices have moved higher in recent months, and HDD vendors are taking
advantage of this opportunity to reset prices and recover some of the excessive
price erosion that began in 2009. IDC said it expects year-over-year HDD
revenue growth to exceed shipment growth in 2012, a precedent for the industry.
Assuming the industry is successful with hybrid solid-state hard drives (hybrid
SSHDs), industry revenue could approach $50 billion by 2016, with a CAGR from
2011 to 2016 of 8.6 percent.
"In many respects, the
hard-disk drive industry has collectively hit the 'reset' button. A reset of
the HDD industry structure should allow for the remaining HDD industry
participants to slowly reduce HDD prices from current levels at a rate that
still delivers value to customers, while at the same time ensuring sufficient
funding is available to develop new HDD technologies that are needed to improve
HDD capacity, performance, reliability, power consumption and security, said John
Rydning, research vice president of hard disk drives at IDC. Still, long-term
revenue growth will only be realized if the remaining participants transform
into storage device and storage solution suppliers with a broad range of
products for a wide variety of markets."
One major theme affecting
the HDD forecast is the shift in demand for HDDs in client devices. While PCs
will continue to represent the largest market for HDDs in terms of unit
shipments, revenue derived from HDDs shipped for PCs is projected to decline
over the next five years, the report said. In contrast, HDD demand from personal
storage, entry-level storage and enterprise applications (combined) is
IDCs research said this
reflects the broader trend to store more content in large data centers and
centralized storage devices in the home or in small businesses, thus making
content accessible to a wide range of consumption platforms, including media
tablets, smartphones, PCs and other connected wireless devices. The report
predicted a longer-term implication is that enterprise storageas opposed to
storage in PCs and CE deviceswill at some point become the major consumer of HDDs,
as it was early in the life of the HDD market.
The report also focuses on
the intensifying battle with solid-state drives (SSDs) in notebook PCs. While
SSDs offer some performance advantages over conventional HDDs, SSD pricing
continues to be an inhibitor to adoption in new PCs. Another way to achieve
faster PC performance without incurring the full costs of SSDs is to use a
smaller amount of NAND somewhere in the PC system in combination with rotating
magnetic disk storage, the report noted. To win this battle, HDD vendors will
need to convince PC manufacturers that hybrid SSHDs offer a more cost-effective
solution to improve PC performance and responsiveness than other solutions.