Will increased PC shipments drive HDD sales?
The top three players in the HDD segment are Western Digital, Seagate Technology (STX), and the Japan-based (EWJ) Toshiba (TOSYY), with market shares of 41%, 39%, and 20%, respectively. PC (personal computer) sales are expected to rise YoY in 2017. It will be interesting to see whether this rise in sales positively impacts HDD sales over the next two years.
HDD (hard disk drive) exabyte shipments rose 20% YoY (year-over-year) in fiscal 1Q17 for Seagate. The firm shipped 66.7 exabytes of storage in fiscal 1Q17. HDD unit shipments totaled 38.9 million units. Average capacity per drive rose 44% YoY to 1.7 terabytes per drive. This was the tenth consecutive quarter of growth in capacity per drive for Seagate. ASP (average selling price) was $67 in fiscal 1Q17 and flat YoY.
Western Digital’s (WDC) HDD (hard disk drive) shipments have fallen steadily, from ~65 million units in fiscal 1Q15 to 48 million units in fiscal 1Q17. Its HDD units have, however, risen compared to 40 million in fiscal 4Q16 and 42 million in fiscal 3Q16.
Stable macro-economic environment
A stable macro-economic environment benefitted Seagate (STX) in the last fiscal quarter, which ended September 2016. The firm also saw an acceleration in adoption and deployment of cloud-based storage. In the company’s fiscal 1Q17 earnings call, Seagate’s CEO Steve Luczo stated, “Demand from cloud service providers for our nearline high capacity portfolio was stronger than we expected going into the September quarter.”