Investing in enterprise SSDs
Western Digital (WDC) believes flash storage will cannibalize hard drives in the future, and the management stated that the firm is positioned to make this transition. WDC is looking to increase investments in enterprise SSDs (solid state drives) to broaden its product portfolio and cater to increasing demand. SSDs are faster than HDDs (hard disk drives) and Gartner has estimated that 83% of mobile PCs (personal computers) and over 62% of desktop PCs to have SSDs as a storage product.
In May 2016, WDC acquired SanDisk, which was one of the biggest NAND Flash memory suppliers used in SSDs. However, the SSD market is far more competitive than the HDD one where Western Digital has a share of over 40%. Seagate (STX) and Toshiba (TOSYY) are the other two companies in the HDD market.
WDC’s enterprise SSD revenue rose 13% in 4Q17
As per Trend Focus estimates, the enterprise SSD market shipped 7.2 EB (exabytes) in 4Q17, a rise of 29% YoY (year-over-year). Wells Fargo’s Aaron Rakers has estimated growth rates for Samsung, Intel (INTC), WDC, Toshiba, and Micron (MU) at 40%, 21%, 13%, 9%, and 5.5%, respectively. WDC reportedly shipped 0.84 EB of data in 4Q17 and accounted for 11.7% of the total enterprise SSD market.
WDC had a share of over 20% in the total SSD market, but this has fallen to below 15% driven by competition from Micron and Samsung. At the start of 2015, WDC led the enterprise SSD space with a market share of over 30%. Despite its acquisition of SanDisk, market share in enterprise SSD has fallen significantly over the last two years.