Hard disks bounce back

MARKET RESEARCH OUTFIT ISUPPLI reckons things are looking up for hard disk makers, with shipments up substantially in the second half and set to continue into 2008.

Analysts report that global HDD shipments grew to 132.5 million units in the third quarter, up 15 percent from 115.3 million in Q2 and will be up by a further 11.3 percent in Q4.

Set-Top Box DVR systems are expected to generate strong demand for disks in the second half of the year, with sales in this segment expected to rise to 22.7 million, up 22 percent from 18.6 million in the first half.

In the first half of the year, average prices for notebook disks fell by about 20 percent per quarter, declining from slightly more than $100 in December 2006 to about $65 in early June 2007. Isuppli says the deep price cuts inflicted so much pain on suppliers that they decided to 'back off from the mad rush to gain market share.'

"Market share alone does not fill the coffers," says Krishna Chander, senior analyst for storage systems at Isuppli. "Higher profits come from identifying and positioning product lines to address emerging trends, rather than battling it out over established commodities that have little differentiation."

HDD shipments will grow alongside rising PC sales in the traditionally strong second half of the year. Global PC unit shipments are expected to rise by 9.8 percent in the third quarter and by 12.4 percent in Q4.

Both Seagate and Western Digital provided more good news half way through the third quarter, says Isuppli. In mid October, Seagate reported 'very positive' third-quarter results, and in early November, Western Digital also reported improved results, with disk revenues of $1.7 billion - up 26 percent from the previous quarter.

Hitachi also showed an upturn, with the company now expecting to post a modest operating profit for its HDD line. All three companies maintained or increased average selling prices, notes Isuppli. µ

L'Inq
Isuppli