Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Manufacturing/Packaging
?
?
Manufacturing/Packaging??

iSupply notes 'surprisingly slow' Q1 for HDD industry

Posted: 19 Jun 2007 ?? ?Print Version ?Bookmark and Share

Keywords:disk drives? HDD industry? solid-state drives?

It was a double knockout for the HDD industry as it got hit by plunging prices and declining shipments in Q1, according to iSuppli.

The market research firm said shipments for the quarter increased by 12.2 percent from the same period a year ago, but fell by 4.7 percent from Q4 of 2006. The sequential decline came as a surprise because of strong demand in the computer market. Shipments of 114 million units in the quarter fell below iSuppli's forecast of 118 million units.

Fierce competition
Prices came under pressure through intense competition among the six major HDD suppliers, particularly in the market for mobile-PC storage. Fujitsu, Hitachi Global Storage Technologies, Samsung Electronics, Seagate Technology, Toshiba, and Western Digital competed over price with similar products for the fast-growing notebook market.

Lower HDD prices in turn led to reductions in the cost of PCs, which was a good news for consumers and businesses. In addition, price drops made HDDs more competitive in the notebook market with the alternative solid-state drives (SSD) based on flash memory.

SSDs are becoming more common in notebooks. The devices are more durable than HDDs, use less power and generate less heat, making SSD a strong alternative in ultraportable notebooks. However, the lower HDD prices are expected to delay the penetration of SSDs in notebooks, which are more expensive.

As a result of stiff price competition, market leader Seagate saw its gross margin fall to 21.3 percent in the quarter from 24.3 percent a year ago, iSuppli said. Net income dropped to $212 million from $274 million. Western Digital also suffered a decline in gross margin to 15.7 percent from 19.3 percent, but the company managed to increase net income to $121 million from $103 million a year ago. Also, Hitachi's net loss widened in Q1 to $150 million from $46 million a year ago.

Pressure on suppliers
To improve gross margins, HDD manufacturers are expected to pressure suppliers to reduce the cost of disks, heads, motors, casings and other materials. iSuppli expects suppliers will be pushed to reduce HDD manufacturers' costs by as much as 5 percent.

In terms of market share, Seagate remained on top in the quarter with a 34.6 percent share of global shipments, which was flat from the previous quarter. Western Digital increased its market share 1 percent to 21.5 percent. Hitachi held steady at 17.2 percent, and Samsung was up slightly at 11 percent. Toshiba was down 1 percent to 7.3 percent, and Fujitsu fell by less than a half percent to 7.1 percent.

- Antone Gonsalves
InformationWeek




Article Comments - iSupply notes 'surprisingly slow' Q1...
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top