Against all odds, HDD & SSD shipments are up

Total shipments for storage devices grew this summer despite the catastrophic earthquake in Japan earlier this year says research firm IHS iSuppli. However, that doesn't mean manufacturers Seagate and Western Digital can put on their party hats; profitability for the HDD market leaders has simultaneously declined.

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Elaborating on a report filed last month, Fang Zhang, analyst for storage systems at IHS, discussed the storage market's overall growth.

"In an ironic twist, the earthquake disaster in Japan had the effect of stimulating the storage market, as manufacturers accelerated orders and increased inventory to ensure adequate supply," said Zhang. "The effect was felt most in the HDD space, the largest storage segment, resulting in higher HDD shipments."

According to Zhang and company, total HDD shipments rose 4.2 percent to just over 167 million units in the second quarter. Other segments of the data storage business saw similar growth. Optical disk drives (ODD) and solid state drives (SSD) increased 4.4 percent and 21.4 percent, respectively. Altogether, the data storage industry shipped nearly 249 million units.

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It's important to remember that while SSD figures increased dramatically, the format still trails way behind its main rival the HDD. Even with the drastic shipment boost, the actual number of devices boasting the storage option hovered around 3.4 million.

IHS believes Intel's companion cache SSDs will aid the technology in the near future. However, the research group warned of possible "teething pains" brought on by high price tags, limited capacities and the industry's own inexperience.

The overall good news was tempered by the fact both Western Digital and Seagate suffered from declining profits. The two companies combined hold around 90 percent of the HDD marketplace.

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"Forces contributing to a decline in profitability included price erosion resulting from higher competition; elevated research and development costs coming from technical issues associated with next-generation drives with higher densities; and the mounting cost of materials, such as rare-earth metals from China," said IHS.

Recent flooding in Thailand could impede consumer electronics production for the remainder of the year. Western Digital said on Wednesday that HDD output from its plants near Bangkok would suffer, but declined to provide solid figures.

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