Seagate Technologies, the world’s largest maker of hard disk drives (HDDs), shipped record amount of hard drives in the third quarter of its fiscal 2010 and said that the total available market (TAM) of HDDs would be constrained by supply this calendar year. Earlier analysts predicted that the supply situation will be easier in the second half of the year.

“With respect to demand in the March quarter, the total available market countered seasonal patterns and grew to approximately 163 million units, higher than our original expectation of between 155 and 160 million units. The 163 million units were likely short of unconstrained demand, as indicated by low inventory levels in our OEM and distribution channels,” said Steven Luczo, chief executive officer and chairman of Seagate.

Seagate on Wednesday reported financial results for the quarter ended April 2, 2010 of 50.3 million disk drive unit shipments, revenue of $3.05 billion, gross margin of 29.6%, net income of $518 million and diluted earnings per share of $1.00. The financial results for the quarter include $9 million of purchased intangibles amortization expense and $4 million of restructuring charges.

The total available market of hard disk drives will be from 155 to 160 million units in the second calendar quarter of the year, according to Seagate. The prediction seems to be a bit strange, considering the fact that Q2 is usually stronger than Q1. However, Seagate claims that there are supply constraints that would last throughout calendar 2010.

“We believe it is increasingly likely that our broader economic recovery in the United States and Europe will occur later in the calendar year, resulting in a potential for increase in demand above our current forecast of 650 million units to 670 million units. We still believe, however, that the HDD industry is constrained to a total output of around 670 million units given capacity, yields, component supply, technology transitions and capital deployment schedule for the remainder of calendar 2010,” said Mr. Luczo.

Tags: Seagate, HDD, Business