Hard Drive Makers Will Enjoy Prosperous Q4 2010

By Chris Preimesberger  |  Posted 2010-12-15

Hard disk drive manufacturers, despite constant pressure from the growing solid-state sector, are expected to compile some sales numbers this quarter that will bring smiles at the end of 2010.

Industry analyst iSuppli reported Dec. 15 that the industry is seeing a late-year boost during the holiday season as companies and consumers dig into their pocketbooks to buy more storage.

The rise in HDD shipments in the fourth quarter will mark the second straight window of growth following a down move in the second quarter. HDD shipments will reach an estimated 169.2 million units during the last three months of the year, which is up 2.2 percent from 165.5 million units in the third quarter.

iSuppli projects industry revenue in the fourth quarter to climb 2.1 percent, amounting to $8.9 billion in sales worldwide.

"The fourth-quarter increases in HDD shipments and revenue reflect positive developments on several fronts, including the stabilization of prices, strong demand from the enterprise segment and a return to normal inventory levels," said Fang Zhang, analyst for storage systems at iSuppli.

The expected growth for the fourth quarter represents a smaller increase than in the third quarter, when shipments climbed 3.4 percent and revenue rose 3.1 percent. Nonetheless, the performance of the second half of 2010 is a major improvement from the first half, iSuppli said. Shipments in the second quarter declined 3.0 percent and revenue fell 7.7 percent from the first quarter.

Western Digital continued as the industry leader, having overtaken Seagate earlier this year at No. 1. WD is expected to ship 51.5 million HDD units in the fourth quarter, up 1.7 percent from 50.7 million units in the third quarter. In comparison, Seagate is expected to ship 49.5 million HDDs, up a smaller 0.6 percent from 49.2 million units during the same period.

On the revenue side, the rankings are reversed, as Seagate is predicted to maintain its lead in the fourth quarter with sales of $2.8 billion, which is up 3.7 percent from $2.7 billion in the third quarter. Western Digital, which sells products in the consumer segment at high volumes but at lower prices, is expected to remain at No. 2 with revenue of $2.4 billion, up a scant 0.2 percent from $2.39 billion in the third quarter.

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