The mechanical HDD industry is seeing a noticeable reduction in sales for many quarters. But January 2020 showed a sharp decline for multiple reasons. The shift in consumer choice and seasonal decline makes it tougher for HDD manufacturers. The COVID-19 pandemic makes a significant dent. We all knew the mechanical hard drive business will decrease just like every storage and tech businesses in the past. It is just that a combination of unforeseen and foreseen circumstances have collaborated together to create an uncertain future for the industry.
The COVID-19 outbreak affected many industries, businesses and services across the world. Restarting businesses will also be a monumental task. The tech and electronics industry is no different due to its manufacturing halt and lack of demand worldwide.
Major reasons for HDD downfall
Analyst company TrendForce surveyed the HDD demand and sales. Year-on-year, its observed there’s a 13% decline, losing 10 million shipments between Q1 2019 and Q1 2020. What will also accelerate the process, is next-generation console using Solid State drives over mechanical counterparts. It was affected by the surveillance market as most of the HDDs for surveillance was purchased in China. Since there are extended and erratic lockdowns due to the COVID-19, the decline in the sale of surveillance and the seasonal decline impacted mechanical hard drive business. As a result, there’s a 20% fall in quarter-to-quarter sales record in PC and surveillance market segment, resulting in selling 23 million mechanical HDD.
Performance-centric enterprise HDD shipments did feel the impact due to seasonal decline and the pandemic. Because of its nature, its production and demand requirement is uncertain for now.
Console’s gain is mechanical HDD’s loss
Sony’s PlayStation 5 and Microsoft’s Xbox Series X will have SSDs by default. Due to the gaming console’s global sales and availability, this will make a significant impact. Note that while many low-cost to mid-end notebooks use mechanical hard drives, the adoption of M.2 and SATA SSDs is inevitable.
Growth in Enterprise HDDs
The bright side for mechanical hard drives is in the nearline enterprise segment as it achieved a record sale of 15.7 million units. This is because of the growth in cloud storage in the United States and increased hyper-scale demand in China.
Mechanical HDD Industry Players
Out of all the mechanical HDD manufacturers, Seagate enjoys 42% global market share, with Western Digital having 37% and Toshiba with 21%. All of these companies also manufacture SSDs in SATA and M.2 format. While it is not the end of the world for mechanical HDDs, the reduction of demand in the retail market will push towards fulfilling small to medium and large business demands. We will see these mechanical HDDs limited to data storage, video surveillance, archives, hosting services, cloud computing and servers. The SOHO NAS storage business is important for the industry. But it doesn’t help when WD switched to an inferior recording system for NAS hard drives, creating a bad experience.
Source: Storage Newsletter