C2Q 2022 Hard Drive Industry Update
Data is available for C2Q 2022 HDD shipments in August 2022 Digital Storage Technology Newsletter.
Total HDD shipments in CQ2 2022 were down 15.5% from CQ1 2022 (44.6M vs. 52.8M). Total exabytes shipped in Q1 2022 increased 23% compared to Q1 2022, driven by higher nearline hard drive capacities.
Notebook hard drive shipments are estimated down approximately 37.2% from the prior quarter, while desktop hard drive shipments are down approximately 10.9% in Q2Q. CE hard drive shipments are estimated down about 26.7%, while branded shipments were down about 11.5% in Q2Q. High-performance enterprise hard drives were down around 6.6%, while near-line enterprise hard drives were down around 5.9% in Q2Q. 3.5-inch hard drives are estimated to be down about 9.0%, Q/Q. 2.5-inch hard drives were down about 27.7% in Q2Q.
Here are Seagate and Western Digital’s actual reports for C2Q 2022. Seagate said it shipped 138.5 EB of mass capacity hard drives, including 119.0 EB in nearby hard drives. They shipped 16.15 Eb of legacy hard drives. The average capacity of large capacity hard drives was 11.5 TB and the average capacity of legacy hard drives was 2.0 TB. The overall capacity shipped by Seagate was 155 Eb with an average capacity per drive of 7.8 To. Seagate hard drive revenue in the quarter was $2,410 million. The company is expanding its 18TB and 20TB-plus Nearline hard drives (22TB SMR drives are now available). At the NAB show in April, I spoke with companies that shipped storage systems with Seagate MACH-2 dual-actuator drives.
On Seagate’s earnings call, Dave Mosley said, “We are also demonstrating technology leadership and executing our product roadmap to meet the growing demand for data. We achieved our fastest ramp ever with a nearline platform of over 20 terabytes, easily beating the projections we made at the start of the quarter. We are on track to achieve a volume and revenue crossover with the 18 terabyte drive in the current quarter. And, “We are executing our development plans for the 30+ terabyte product family based on our innovative technology and HAMR, which enables capacity points of 30, 40, 50 terabytes and beyond to support future growth. of the data request.”
Western Digital reported that its total 2022 EB C1Q hard drive shipments increased 1% from the prior quarter (I estimate EB 153). They also said customer compute units shipped were 3.9 million, consumer hard disk drives shipped were 3.3 million, and data center (cloud) hard disk drive shipments were of 9.3 million. Western Digital said its ASP in the quarter was $120 (compared to $101 in the prior quarter). Cloud storage accounted for 40% of Western Digital’s revenue in the quarter.
David Goeckeler of WDC said, “We have begun commercial shipment of a number of products incorporating our OptiNAND technology. In addition to shipments of our 20 terabyte and 22 terabyte CMR drives, qualifications for our 26 terabyte SMR drive are underway, as noted at our product launch event in May. He also said, “In the cloud end market, we saw strength in the fourth fiscal quarter as supply constraints at Western Digital and our end customers began to ease. Overall, demand from our cloud customers has always been strong and we expect this cloud strength to continue into the second half of calendar year 2022. We believe accelerated digital transformation will continue to drive growth in the cloud and believe we are on track to generate approximately half of our revenue in this market by FY2025.”
There was a 13.2% Average Selling Price (ASP) increase from C1Q 2022 to C2Q 2022. The multi-year ASP trends are shown in the image below. The increase in ASP at CQ2 2022 was due to increases in ASP at Seagate and WDC. In general, the increase in the percentage of more expensive mass-storage enterprise hard drives has led to an increase in hard drive ASPs since 2015, as legacy applications (e.g., PC storage and enterprise hard drives high-performance enterprise lost ground to SSDs).
The image below shows the 2022 HDD market share to date (by units).
The image below shows the high, mid, and low estimates of total drive unit volume estimates through 2026. Based on the hard drive companies’ third-quarter second-quarter earnings projections and from the current economic outlook, we are removing 20 million from our previous estimates of hard drive shipments in 2022.
We expect demand for heads and media to double by 2026. The growth of capacity driven nearline drives for enterprise and hyperscale applications will result in more components per drive through 2027 and is the primary motor for heads and supports. We expect total head and mount shipments to exceed the 2014 peak by 2022.
HDD shipments at C2Q 2022 decreased by 15.5% compared to C1Q 2022. Total exabytes shipped at C1Q 2022 increased by 23% compared to C1Q 2022, driven by HDD capacities close to higher. ASP HDDs increased to $120. We have reduced our total HDD projections for 2022.