News
 

Bookmark and Share

(1) 

While Seagate Technology lost its leadership position on the market of hard disk drives in the second quarter of 2012 to WD, it may regain it in the third quarter, according to analysts from IHS iSuppli. The market research company estimates that 157 Million of hard drives were shippped last quarter with around 87% by Seagate and Western Digital.

Seagate May Regain Lead

In Q2 2012 Western Digital produced approximately 71.0 million HDD units, including production from Hitachi GST, a company acquired by Western Digital earlier in the year. Revenue for Western Digital amounted to $4.8 billion, a company record. In comparison, Seagate shipped 65.9 million HDD units during the same period, with revenue reaching $4.5 billion, also a record in Seagate’s books. The third player in the HDD storage segment, Toshiba of Japan, produced 20.1 million HDD units and posted approximately $1.1 billion in revenue in the second quarter.

“Western Digital lost its No. 1 unit shipment ranking to Seagate in the fourth quarter of 2012 after flooding in Thailand damaged its HDD manufacturing facility. The company now has fully recovered from the disaster, allowing it to sharply increase shipments of HDDs for notebook PCs, up 28% from the first quarter. Western Digital is on track to retain the top spot in shipments and revenue for the third quarter,” said Fang Zhang, analyst for storage systems at IHS.

Total HDD shipments for the second quarter amounted to 157.0 million units, up 8% from 145.1 million in the first quarter. Western Digital enjoyed the biggest shipments share at 45%, followed by Seagate with 42% and Toshiba with 13. Total HDD revenue for the second quarter hit $10.3 billion, compared to $9.6 billion in the first quarter.

Seagate, the market revenue leader for most of the time in the past decade, is forecast to sit in the runner-up spot again in the third quarter, IHS said. Despite its fall to No. 2 in the second quarter, Seagate is the leader in the desktop, enterprise and non-PC segment, such as consumer electronics.

HDD Margins Remain High

Gross margins continued to remain high for both Western Digital and Seagate, indicating flush results, despite being a small decline in the second quarter.

Western Digital’s gross margin of 31% was 1% lower than in the first quarter, but still much higher than the previous record of 26.2%, seen some time ago in the fourth quarter of 2009. The slight decrease in margin was likely caused by pricing pressure three weeks before the end of the second quarter.

Seagate’s gross margin, in comparison, fell to 33%, down from 37%, but also still in better shape than the pre-flood level of 19.3%. Part of Seagate’s lower margin was the result of product-specific concerns, such as noise issues in some desktop HDDs as well as contamination problems with some mission-critical enterprise HDDs. Both required a rework on Seagate’s part, adding to costs. The company says the matters have been resolved, however, and third-quarter margins should remain in the 30% range.

The tussle between Western Digital and Seagate - one of the historic continuing rivalries in the technology industry - is not about to ease up anytime soon. In particular, the fourth quarter will be a tossup, and the industry champion by then will depend on how well each company executes for the remainder of the year, coupled with the market performance of enterprise and consumer PC solutions on which hard disk drives depend.

Tags: Seagate, Western Digital, WD, Toshiba, HDD, Business

Discussion

Comments currently: 1
Discussion started: 08/31/12 02:09:38 AM
Latest comment: 08/31/12 10:17:09 AM

[1-1]

1. 
Not surprised, Seagate is way underpricing WD. Seemed clear to me they wanted to get their market leadership back.
0 0 [Posted by: cashkennedy  | Date: 08/31/12 10:17:09 AM]
Reply

[1-1]

Add your Comment




Related news

Latest News

Wednesday, August 27, 2014

9:09 pm | Samsung Begins to Produce 2.13GHz 64GB DDR4 Memory Modules. Samsung Uses TSV DRAMs for 64GB DDR4 RDIMMs

Tuesday, August 26, 2014

6:41 pm | AMD Quietly Reveals Third Iteration of GCN Architecture with Tonga GPU. AMD Unleashes Radeon R9 285 Graphics Cards, Tonga Graphics Processor

Monday, August 25, 2014

6:05 pm | Chinese Inspur to Sell Mission-Critical Servers with AMD Software, Power 8 Processors. IBM to Enter Chinese Big Data Market with the Help from Inspur

Sunday, August 24, 2014

6:12 pm | Former X-Bit Labs Editor Aims to Wed Tabletop Games with Mobile Platforms. Game Master Wants to Become a New World of Warcraft

Thursday, August 21, 2014

10:59 pm | Khronos Group to Follow DirectX 12 with Cross-Platform Low-Level API. Khronos Unveils Next-Generation OpenGL Initiative

10:33 pm | Avexir Readies 3.40GHz DDR4 Memory Modules. DDR4 Could Hit 3.40GHz This Year

12:10 pm | AMD to Lower Prices of A-Series APUs for Back-to-School Season. New Prices of AMD A-Series APUs Revealed