Navigating the twists and turns of the hard disk drive (HDD) industry's extensive history is no walk in the park. Back in 1956, IBM introduced HDDs, and despite the rise and fall of various tech industry analysts tracking the revenue and sales volume of this mechanical storage segment, HDDs have stood the test of time. Tom Coughlin, President of Coughlin Associates and a storage analyst and consultant, recently teamed up with Tom Gardner, a colleague in the hard disk business, to share some insightful charts reflecting the HDD industry's performance over the past 67 years.
These charts provide the best estimates we have of HDD industry revenue up to the present day. Gardner color-coded the data from different analyst firms, revealing some overlaps in various eras. While the linear chart exposes glitches in collating revenue from different analysts, the logarithmic vertical scale chart portrays a smoother and more predictable revenue trend up to the present day.
Both charts unmistakably indicate that the HDD industry hit its peak revenue in 2012. Coughlin points out an interesting fact that peak shipment volumes for HDDs occurred in 2010. So, why the difference? Those familiar with PC DIY for over 15 years may recall the Thai floods in 2011, causing HDD shortages that influenced pricing due to supply and demand imbalances.
Another noteworthy observation by Coughlin is that, despite the decline in HDD revenues and shipment volumes, "HDD prices have been generally increasing." As SSDs have taken over in lower storage capacity consumer devices, the market has shifted towards high-capacity devices. Gardner's charts make it evident that the HDD industry is currently in a phase of rapid declines. "In 2022 HDD total shipments were 172 million units and $20.4 billion," notes Coughlin. "We estimate that unit shipments in 2023 will total about 127 million units with total revenues less than $14 billion." Most would agree that it's a substantial decline.
Looking ahead to 2024, there seems to be a silver lining for the HDD industry. According to sources, it is anticipated to be a favorable year for all types of storage device manufacturers. The AI boom is expected to drive increased demand for both NAND Flash and HDD storage.
In the upcoming year, it is projected that the remaining HDD manufacturers will ship 127 million units (equivalent to around 900 Exabytes of data capacity) with revenues just under $14 billion. While these figures may resemble those of the previous year, at least the steep decline is expected to have come to a halt, at least for now.
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