HDDs Down In 2022 But Expected Recovery Starting In 2023

This text incorporates data on the C4Q 2022 laborious disk drive business from the newest Digital Storage Know-how Publication.

Though HDD shipments in models and exabytes had been down once more this quarter, the decline was much less extreme than in C3Q 2022 (5.4% decrease on unit shipments and 21% decrease on exabyte shipments). This continues the decline in quarterly HDD shipments that began in C1Q 2022. The continued decline in C4Q 2022 was pushed by lowering nearline HDD shipments. However each Seagate and Western Digital indicated that they anticipated HDD exabyte shipments to pattern up by the second half of 2023.

Seagate mentioned that they shipped 96.7EB of mass capability laborious disk drives with 79.7EB of this being in nearline HDDs. They shipped 15.8EB of legacy HDDs. The typical drive capability of mass capability HDDs was 11.9TB and the common drive capability for legacy HDDs was 2.2TB. Seagate’s general capability shipped was 112.5EB with a median capability per drive of seven.3TB. Seagate’s HDD income within the quarter was $1,663M. The corporate mentioned that over 60% of the Mass Capability HDDs shipped within the December quarter had been 20+TB and that by June 2023 it might be transport HAMR HDDs with 30+TBs.

Seagate additionally expects to get traction in 2023 with the manufacturing launch of their warmth assisted magnetic recording (HAMR) drives. In Seagate’s earnings name, CEO Dave Mosley mentioned, “Within the present market setting, we have been profiting from our decreased manufacturing facility utilization to speed up cycles of studying round HAMR productization. We’re assembly or exceeding all product growth milestones and reliability metrics, and we shall be transport prequalification models to key cloud prospects within the coming weeks. Because of this progress, we now anticipate to launch our 30-plus terabyte platform within the June quarter, barely forward of schedule.” Seagate believes that its HAMR introduction will give the corporate a multi-year benefit over their competitors.

Western Digital reported that their C4Q 2022 whole HDD EB shipments decreased by 35% from the prior quarter (I estimate this at 100.4EB). Additionally they mentioned that shipped shopper compute models had been 4.0M, client shipped HDD models had been 3.4M and knowledge heart (cloud) HDD unit shipments had been 5.5M. Western Digital mentioned that their ASP within the quarter was $99 (down from $125 within the prior quarter). Cloud storage represented 39% of Western Digital’s income within the quarter (down 10% from the prior quarter). WDC is seeing the strongest development within the firm’s shingled magnetic recording (SMR) nearline drives, together with its 26TB UltraSMR drives.

David Goeckeler of WDC mentioned, “Cargo of capability enterprise drives based mostly on SMR applied sciences exceeded 25% of this class, one quarter forward of our expectations. We now anticipate SMR to symbolize over 40% of our capability enterprise exabyte cargo exiting fiscal 12 months 2023.” He additionally mentioned that SMR adoption drove a 19% sequential and 21% year-over-year improve in common capability to 17 terabytes per capability enterprise drive within the final quarter.

There was a an 12.7% common gross sales worth (ASP) decline from C3Q 2022 to C4Q 2022 following a 1.6% decline in C3Q 2022. The multi-year ASP traits are proven within the picture beneath. The ASP lower in C4Q 2022 was as a result of massive ASP decreases at WDC (down 20.8%) and ASP decreases at Seagate (down 4.8%). Till mid-2022, the growing proportion of dearer mass storage enterprise HDDs led to a rise in HDDs ASPs since 2015, as legacy purposes (e.g. storage for PCs and excessive efficiency enterprise HDDs have misplaced floor to SSDs).

The desk beneath exhibits C4Q 2022 estimated Exabytes Shipped by firm and basic software. Word that per Seagate’s stories, Legacy contains PC, CE, Branded and enterprise purposes. Additionally observe that WDC solely provides a change in whole exabytes shipped for the quarter versus the prior quarter and Toshiba didn’t report different mass storage exabytes.

Whole exabyte shipments in 2022 are proven beneath.

The pie chart beneath exhibits 2022 HDD market share (by models). Word that Toshiba gained a proportion market share from C3Q 2022 to C4Q 2022 on the expense of WDC.

The determine beneath exhibits some historical past and our projections for disk drive annual shipped capability development out to 2028. Due to the necessity for high-capacity HDDs in knowledge facilities we consider that transport capacities will begin to recuperate from their fall in 2022 by the second half of 2023.

The determine beneath exhibits historical past and our projections for shipped capability of SSDs, HDDs and magnetic tape out to 2028. The drop in 2023 impacted HDDs, but in addition SSDs.

HDD unit and exabyte shipments had been down once more in C4Q 2022, however by lower than within the prior quarter. General HDD unit and shipped storage capability had been 33.4% and 14.5% in 2022 in comparison with 2021, with the largest drop in nearline HDD demand. With the rising quantity of knowledge being created and saved, we anticipate that the nearline HDD market will begin to recuperate by the second half of 2023.