Disk Drive Market Expert Sees 2011 as Year of Rebound

According to one respected industry insider, it might take until 2011 for the consumer hard disk drive market to recover from the doldrums caused by the recession.

Seagate, Samsung, Western Digital, and Hitachi — the world’s largest drive manufacturers — have all endured sinking revenue during the last year. They’re apparently going to remain lost in the woods for a while yet.

Tom Coughlin, principal analyst of Coughlin Associates, puts on a number of excellent industry conferences each year, including the Flash Memory Conference, the Creative Storage Conference, and Storage Visions. In his latest Digital Storage Technology Newsletter, Coughlin reports that in the fourth quarter of 2008, hard disk drive shipments declined about 19 percent from Q3 2008 (an unprecedented Q3 to Q4 drop), and as a result total HDD units shipped in 2008 only increased by about 8 percent from 2007.

Coughlin said that total HDD shipments for 2008 were about 540 million units, which is up 40 million from the previous year. The first half of the year was good; it’s the current trend, though, that is worrisome.

“PCs (desktop and laptop) are the biggest users of HDDs, and there are reasonable projections that total PCs [sales] will decline by at least 5 percent in 2009,” Coughlin said. “Consumer electronics products that use flash are expected to decline by 7 percent or more in 2009 over 2008. In general, digital storage device demand will suffer along with demand for the products that use them.”

Coughlin wrote that “there is more downside than upside ahead, and as a consequence, HDD unit shipments in 2009 will experience their worst year-over-year decline ever. The total decline in HDD units in 2009 over 2008 will be between 5 percent and 9 percent, with a decline of 7 percent being likely.”

Total HDDs shipped in 2009 could be about the same as in 2007, or about 500 million units, Coughlin said. However, digital storage device demand eventually will recover, Coughlin said.

“Actual storage needs continue to grow and as a consequence, a lack of growth this year will lead to significant disk drive unit growth when the economy recovers. It is expected that there will be positive growth in 2010, year over year, and that with a recovery, 2011 could see annual unit growth much greater than the average, perhaps even 20 percent or higher (as it was in 2003),” Coughlin said.

Whew. Good news for a change. The question is: Can we be patient until it actually arrives?