Electronics Production | April 13, 2006
Hard-drive shipments achieve record increase
The global Hard Disk Drive (HDD) industry set an all-time record for growth in 2005, with shipments rising by a stunning 71 million units for the year, according to iSuppli Corp.
Global HDD shipments increased to 376 million units in 2005, up 23 percent from 305 million in 2004. This 71 million increase represents the largest annual rise in unit shipments in the history of the HDD industry, eclipsing the previous mark of 41.6 million units in 2003. "For nearly all HDD makers, 2005 was the best of times, and it was-well-the best of times," said Krishna Chander, senior storage analyst for iSuppli. "While there were a few challenges for suppliers in 2005, it's hard to find much to complain about in a year when the biggest problem was a component shortage due to booming sales of HDDs." The HDD market enjoyed robust demand from every major target market. However, the fastest-growing segments were the mobile-PC and consumer-electronics areas. Mobile PC shipments rose robustly in 2005. Meanwhile, in the consumer-electronics market, HDDs found increased usage in products including MP3 players, Personal Media Players and set-top boxes equipped with Digital Video Recorders. Due to the richer mix of products offered by suppliers, the HDD industry in 2005 achieved improved Average Selling Prices (ASPs) compared to 2004, allowing manufacturers to increase their profitability. On the negative side, the HDD supply chain was slow to react to the explosion in demand, leading to shortages of disk media. Furthermore, the anxiety level of the HDD market was raised by Apple Computer Inc.'s move to switch from hard drives to NAND flash memory for its iPod music players, a development that hurt demand for 1-inch drives. However, Apple later introduced its HDD-based iPod video, which led to a resurgence in sales of 1.8-inch drives. In general, NAND flash memory in 2005 served as a bogeyman for the HDD industry, with much speculation that hard drives would be displaced by solid-state memory in consumer-electronics products and other devices. The year 2005 also was packed with surprises for HDD makers. The biggest shocker was Seagate's announcement of its intention to acquire Maxtor Corp. Another surprise was Fujitsu's plan to collaborate with Cornice to develop HDDs for the consumer-electronics market. Looking at the HDD suppliers themselves, Seagate Technology LLC padded its position as the global market leader, with 28.7 percent of total factory unit shipments in 2005, up from 27 percent in 2004. The Scotts Valley, Calif.-based firm maintained its lead in the markets for HDDs in desktop PCs and enterprise computers. Number-two supplier Western Digital Corp. (WDC) of Lake Forest, Calif. held onto its second-place position in 2005 with 17.7 percent of HDD factory shipments, despite losing three-tenths of a percentage point of share compared to 2004. WDC maintained its second-place position in desktop-PC HDD shipments. Hitachi Global Storage Technologies (GST) of San Jose, Calif. rose one rank to take the number-three position in worldwide factory shipments. The company surpassed Maxtor with its market share increasing to 15.5 percent in 2005, up from 15.3 percent in 2004. Hitachi GST held onto the top position in the rapidly expanding market for HDDs for mobile PCs. The biggest market-share decline among the HDD suppliers in 2005 was posted by Maxtor Corp., with its portion of HDD unit shipments falling to 14.1 percent, down 3.5 percentage points from 17.6 percent in 2004. The Milpitas, Calif.-based company has encountered challenges due to management shifts, a lack of smaller form-factor products and-to a small degree-the impending acquisition by Seagate. iSuppli's ranking of the top-seven HDD suppliers in 2005 is presented in the table below and attached.
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