Seagate Technology may not be the maker of the world’s most capacious or fastest hard disk drives (HDDs), but it is the largest producer of hard drives, according to research firm iSuppli. While no maker of HDDs demonstrated growth in terms of market share in the second quarter, Seagate has managed to expand its lead in the market.

During the Q2 2005 HDD approximately 89.7 million HDD units were shipped, which is 2.8% higher compared to the Q1 2005. This contradicts to general patterns of HDD shipments, as in Q2 they usually tend to decline. The success of Seagate is further confirmed by the fact that the company managed to overcome the issues with supplies of HDD media.

“The second quarter usually represents the annual low point of the HDD market, and unit shipments tend to decline compared to the first quarter. However, strong end demand for computers and consumer-electronics products generated abnormally robust conditions for HDD makers in the second quarter,” said Krishna Chander, senior storage analyst at iSuppli.

U.S.-Based Suppliers Take Advantage

Seagate, along with fellow U.S.-based HDD suppliers Western Digital and Maxtor benefited from this surge in demand. Two of these companies experienced a rise in shipments and all three reported net profitability for the quarter.

Of the three Japanese HDD suppliers, only Fujitsu HDD’s division was known to be profitable, according to press reports. However, gauging the profitability of the Japanese suppliers is difficult, given that their parent companies do not divulge the financial results of their HDD divisions.

Western Digital retained its second-place ranking in the HDD sector in the second quarter, with a 17.6% share of unit shipments, up slightly from 17.5 % in the first quarter.

Maxtor fell to fourth place in the second quarter, down from number-three in the first quarter. The company’s share of global HDD shipments declined to 13.5% in the second quarter, compared to 16.3% in the first.

Maxtor’s decline in market share was due to changes in its outsourcing strategy and its expansion in offshoring in the second quarter. The company moved its production of desktop HDD assemblies to China from Singapore. Maxtor also is transferring some of its disk production to Asia from the United States.

The resulting production disruptions caused the company to lose some market share. However, in a surprise development, Maxtor reported a profit of US$10 million for the second quarter, bringing an end to several consecutive quarters of losses.

Asian Manufacturers on the Move

Number-three-ranked Hitachi Global Storage Technologies (GST), based California but owned by Hitachi of Japan, expanded its market share to 15.5% in the second quarter, up from 15.4% in the first. The company ranked fourth in the first quarter. Hitachi GST in May instituted changes in its top management, which are likely to impact the company’s results in the following quarters.

Fujitsu’s HDD operations were reported to be profitable in the second quarter, despite the fact that the company does not serve the fast-growing consumer-electronics segment. The Japanese supplier presently only addresses the more mature enterprise- and mobile-computing HDD markets. Fujitsu accounted for 6.7% of unit shipments in the second quarter, up from 6.5% in the first, allowing it to maintain its seventh-place ranking.

Toshiba also maintained its fifth-place ranking in HDDs with a 7.7 % share of unit shipments. The Japan-based company is expected to soon start shipping 1.8-inch hard drives based on its new perpendicular recording technology.

Samsung of South Korea also achieved a modest increase in market share, rising to 6.9% in the second quarter, up from 6.6 % in the first, keeping the company in sixth place.