Report Says HDD Industry Hit Bottom in 2001

The hard disk drive (HDD) industry endured an 18% revenue decline in 2001, according to a research report just published by research firm TrendFOCUS.

The report says unit sales to traditional computing applications dipped 4% last year as well, as demand eroded due to slumping PC and server sales. However, 2001 should prove to be the low point for the industry, as growth in storage demand will resume in 2002, according to the Computer Storage Demand Analysis System (CSDAS).

“The HDD industry came through 2001 smarter,” stated Mark Geenen, president of TrendFOCUS. “Traditionally, weak demand meant HDD price wars. This didn’t occur in 2001,” added Geenen. PC sales will rebound in 2002, as will demand from enterprise storage applications. HDD shipments to traditional computing applications will grow 7% through 2005.

“This dynamic market will continue to evolve quickly, fostering a tremendously competitive environment,” reported John Donovan, vice president of TrendFOCUS. The report says key points include:

— PC storage capacities for desktop computers will grow from
20-40 GB in 2001 to over 200 GB in 2005, as applications like
video editing and digital photography are fostered by
broadband Internet connections;

— After a decline in shipments of enterprise HDDs, this market
will firm and grow through 2005

— 15,000rpm drives will take over the enterprise HDD market in
2004, and will be followed by 20,000+rpm products;

— Technically, the HDD industry will be a hotbed of innovation
and progress. Areal density growth, while slowing, will
continue to outstrip Moore’s Law of semiconductor development.
2.5″ and smaller drives have an opportunity to invade the
desktop PC market, provided that prices are equivalent with
those of 3.5″ HDDs. And suppliers of technology and material
to the HDD industry will finally see a reprieve in demand
conditions, as changes in product design and technology will
renew capital investment and greater reliance on outside
sourcing.

“Our research clearly shows the HDD industry is on the rebound,” added Donovan. “And when you add the booming demand for HDDs in the consumer market, like home networks, gaming, personal video recorders, and MP3 players, there will be unprecedented opportunities in the HDD industry.”