September 20, 2006
Market Perspective
The market watches nervously for clues as to how and if the recent coup in Thailand will have an impact on the electronics industry. Fears run the gamut - from the extreme end, and the unlikely nationalization of industries, to the more likely of potential new duties, tariffs, and supply disruptions as a result of temporary plant closures resulting from the uncertain political situation. The display industry will feel little impact as there is no existing infrastructure on the ground in Thailand. However, the storage industry is far more vulnerable with Western Digital, Hitachi and Seagate having manufacturing capacity in Thailand.
Overall the pricing trends are fairly stable with a slight upward trend in 3.5” desktop pricing. This trend is due to the competitors of Seagate taking advantage of Seagate’s integration of Maxtor and the continued Windows Vista delay. Business in other areas (enterprise, consumer, mobile) appears unchanged/stable. Horizon believes long-term (6-12 months out), it will see the benefits of industry consolidation with less players. Horizon continues to favor STX with its lead in PMR technology.
Desktop
Recently, Samsung announced they will be discontinuing 40GB and 80GB capacities. With this announcement, Seagate and Western Digital are expected to raise OEM pricing by $1.00 for 40 and 80B capacities. It will be interesting to see if this moves OEMs to higher capacities.
Mobile
The Mobile market continues to show strength. Demand is growing due to increasingly more applications using mobile storage. Specifically, we are seeing a strong demand for Toshiba "automotive" drives. This drive spec's to a higher temperature and more ruggedized environment. Expect the trend in 2007 to increase with more and more automobiles coming with factory installed HD’s. This sets up an interesting dynamic with the ongoing consolidation in the storage industry and notebook manufacturers finding themselves in 2007 competing for capacity with automobile manufacturers.
Western Digital has recently released its new 1" drive, shipping in very low qty's. Word on the street is that the majority of capacity is shipping to Apple for their Ipods. Expect capacity to continue to be dedicated to Apple over the next few quarters.
SCSI
The SCSI market continues to show weakness with a five to ten percent slide in pricing in the market. However, with Seagate currently owning seventy percent market share, Horizon is hearing that inventory will be low with potential allocation issues in Q4. This is not necessarily due to increase in demand but a capacity shift. Seagate is ramping up production of 1", 2.5" form factor and pulling capacity from SCSI lines.
For availability and pricing contact: 949.595.8244 or visit www.horizontechnology.com
Home > Storage Market Perspective
Storage Market Perspective
Copyright © 2008 Horizon Technology
