Seagate says HDD demand will outstrip supply in 2012

Seagate says hard disk drive demand will exceed supply this year but the company says it is faring better financially than expected.

Segate Momentus XT hybrid hard disk drive.
Segate Momentus XT hybrid hard disk drive. Seagate

Hard disk drive supplier Seagate Technology provided a financial update today, reiterating that demand for HDD units will exceed supply in 2012 in the wake of flooding last year in Thailand.

Seagate updated its financial outlook for fiscal second quarter 2012 on Wednesday afternoon, stating it shipped approximately 47 million disk drives, which included approximately 700,000 Samsung disk drives.

Revenue is expected to be between $3.1 billion and $3.2 billion, the company said. Analysts had projected revenue of $2.79 billion on average, according to Bloomberg. Seagate completed the acquisition of Samsung's hard disk drive business in December.

Supply will not catch up with demand anytime soon. "The company continues to believe that during calendar 2012 unit demand will exceed supply," Seagate said.

But Segate claims prices should remain relatively stable. "The exabyte (overall capacity) shortage will be more pronounced than the unit shortage, and as a result pricing is expected to remain stable," Seagate added.

Overall capacity demand is growing at between 40 percent and 50 percent per year so by the time the unit supply is back on track, the gap for unmet capacity demand will be much higher, a Seagate spokesman said in response to an e-mail query.

The average capacity per drive is now 653 gigabytes, Seagate said. Increasing the average has helped it weather the supply chain disruption and to better meet unit demand.

Intel said last month that, largely due to the HDD shortage, it will see a revenue shortfall of $1 billion . "We do expect...[the] shortage of HDDs to be pretty significant in the early part of 2012," Stacy J. Smith, Intel's chief financial officer, told analysts in a December 12 conference call.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.

 

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