Transcript TrendFOCUS Seminar - International Disk Drive Equipment

HDD Market Update:
Steadier, Simpler Times Ahead,
or More of the Same?
November 7, 2007
IDEMA Analyst Breakfast
Topics
HDD Industry Update
– 2007 HDD forecast, adjustments
– What is driving storage demand?
SSD/flash: is the threat real?
Conclusions
HDD Industry Update
2007 shipments have tracked as expected
CE is disappointing, or is it?
SSD/flash threat growing, or is it?
Consolidation is the buzzword
– Seagate/Maxtor, WD/Komag
– Is there more HDD consolidation? Media?
Overall, the HDD business is normal
2007 Forecast, Adjustments
Desktop PC market as expected
Slightly stronger mobile computing demand –
capacities mirroring desktop
No surprises in enterprise totals
– Quicker SFF adoption, SAS rising fast
CE reevaluation
– DVR/PVR solid in US, Japan, slower elsewhere
– Game consoles and HDDs have hit speed bump
– PMP – life expectancy?
Original 2007 Forecast
(February, 2007)
Units (M)
900
Computing-driven demand
throughout
CE portion – >20% in ’07 –
to – 27% by ’11
2.5” engine for growth –
notebooks!
2.5” to surpass 3.5” by end
of forecast
1.8”-and-below weak
800
700
600
500
400
300
200
100
0
2007
2008
2009
2010
2011
3.5" Computing
2.5" Computing
1.8" Computing
3.5" CE
2.5" CE
<=1.8" CE
Revised 2007 Forecast
(August, 2007)
Units (M)
800
’07 lowered 1% - to 495+
million
CE portion – >20% in ’07
growing to 24% by ’11
700
600
500
2.5” outlook bolstered –
notebook growth!
400
Roughly reduced each year
by 3-4%, mainly in CE
200
<=1.8” demand changing
300
100
0
2007
2008
2009
2010
2011
3.5" Computing
2.5" Computing
1.8" Computing
3.5" CE
2.5" CE
<=1.8" CE
Seasonality is Here to Stay
HDD Quarterly Shipment % Change (1998 - CQ2 '07)
Source: Trend FOCUS, Inc.
24%
22%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2 CQ3 CQ4 CQ1 CQ2
'98 '98 '98 '98 '99 '99 '99 '99 '00 '00 '00 '00 '01 '01 '01 '01 '02 '02 '02 '02 '03 '03 '03 '03 '04 '04 '04 '04 '05 '05 '05 '05 '06 '06 '06 '06 '07 '07
-4%
-6%
-8%
-10%
-12%
-14%
-16%
-18%
SDAS - % Change
HDD Growth – Computing Market
Units (M)
300
Traditional PC market still
growing
250
Mobile market surging
200
Average capacity growing
150
Mobile society STILL needs
some form of PC
100
Desktops NOT dead
50
0
2003
2004
Desktop
2005
Mobile
2006
Enterprise
2007e
HDD Growth – External Market
Units (M)
GB
35
300
External HDDs booming
Used in both computing, CE
30
250
25
200
20
150
15
100
10
– <=2.5” externals gaining
Video, music content grows
exponentially every year
– Much higher capacity than
embedded HDDs
Margins shrinking – looking
more like (traditional) HDD
market
50
5
0
0
2003
2004
2005
Shipments
2006
2007e
Avg Capacity
Source: TFI, Seagate
HDD Growth – CE Market
Units (M)
90
CE market evolving
80
Inflection point is going to
come, but when?
70
60
DVR/PVR will be a primary
market
50
Other applications are
small…….
40
30
……..but add up to fuel
growth
20
10
0
2003
2004
3.5"
2005
2.5"
1.8"
2006
<=1.0"
2007e
How to View CE After 7 Years
Hype has outpaced results – but STILL an
important piece of the long-term growth outlook
PVR/DVR has been frustrating – but promise is
intoxicating – for both 3.5” and 2.5”
2.5” – gaming, AIS, MFP, now some PVR
<=1.8” – iPod and other handhelds……soon to
be invisible in a flash?
Consolidation
Leading HDD, component companies profitable,
so which will have a strategic view?
Media market looks heavy, and incremental
investment looms in 2009
Hitachi GST is on the rumor mill, but will
something actually happen?
Where else can consolidation occur?
Is SSD a Legitimate Threat?
Short-term, impact not significant
Longer-term, the threat grows for small HDDs
But, there are two key assumptions
– NAND flash doubling in density, halving in price
annually
– NAND technology sustains and then transitions easily
in 2010-2011
SSD vs. HDD – (Today’s) Winner Is…
Capacity (GB)
ASP
$/GB
Avg transfer rate
- Read
- Write
Avg access time
MTBF
Shock
- Operating
- Non operating
Acoustic
Power (Read/Write)
Battery life
2.5"
80
$46
$0.58
SSD
32
$450
$14.06
42 MB/s
42 MB/s
12 ms
1,200,000
67 MB/s
47 MB/s
0.11 ms
2,000,000
300G
900G
2.1 dB
1.9W/2.3W
-
1,500G
1,500G
0 dB
0.95W/0.95W
+10-20 min
SSDs in the Enterprise
There is margin to accept higher costs
There is a business case to use SSDs here
– Power is lower than HDD
– Random IOPs 20-50 times higher than HDD
– 25% cheaper than DRAM today
Costs are still not in line with segment building,
but…….
……..1 18 GB SSD can replace many 15krpm
drives
Conclusions
SSDs face serious obstacles
– Cost
Advantages worth the premium?
Comparing SSD to 1.8” is invalid; 1.8” is niche
2.5” is the real battleground
– Low-capacity
– SSD specs still in question
– OEM relationships
Will PC OEMs accept price increases when flash
supply is tight?
– There is ZERO precedent for that with HDDs
Conclusions (continued)
HOWEVER….
– HDD suppliers still have time to PLAN!
– New technologies (PMR, patterned media, HAMR,
etc…) will keep HDD capacities well ahead of SSD
– While the capacity gap is shrinking, it is still sizable
and should remain so for years
– Flash-based CE devices means more HDD-based
storage modules – lots of pictures/video/music
– Steadier times are coming, so hang on!
Thank you!