Seagate was behind WD on 8TB and the company was decimated during the first six months of this year, leading to a massive RIF. They caught up with their 8TB on air and were able to be aggressive on pricing given a bill-of-materials advantage (less disk, heads and no helium). I think the same story may repeat on 10TB given that WD is on their 3rd generation and Seagate is having trouble ramping 10TB. Bill-of-material advantage goes away too, so can't steal market share. Feel like this rebound is temporary and more, deeper RIFs are on the way. Thoughts?
3 replies (most recent on top)
I thought Luzco said STX was poised and waiting to deliver the "knockout" of WDC any moment now? What a joke. The only ones getting the knockout are laid off employees, while parachutes are being prepared at the top.
One of the reasons the HDD TAM has stabilized for this quarter and predicted for the next is the inability for the flash players to produce sufficient product for the demand. However this will change from the middle of next year and the HDD TAM will continue it's downward trend again until it bottoms out to supply a market that doesn't need SSD (Surveylance and archive market). Whether this market will be big enough for both Seagate and WD together is yet to be seen. One thing is for sure and that is before that time comes there will be further reductions in both companies to adjust to the declining HDD market. The HDD market has been falling year on year and this year is no different. Both companies are guilty of writing SSD off when it first reared it's head. They both had the money and facilities back then to be lead players in this new technology but didn't have the senior managers with enough foresight. Just think what would have happened with TDK if they had ignored the CD and DVD technology and continued making bigger cassette tapes to the point where they wouldn't have fitted your stereo unit. HDD will probably max out at 12Tb unless someone has cracked the yet elusive HAMR drive. The next couple of years are guaranteed to be a bumpy ride in the HDD business...Are we all ready for the ride...!
Both companies will continue to have significant layoffs and Seagate has made that clear already. Both companies have very flawed flash strategies and will struggle to be relevant in the SSD space for some time. The layoffs will continue until one or both companies can make a legitimate SSD push to replace the loss of consumer, client, boot, and mission critical HDD share.