14 DAY TRIAL // Those up-to-date with current events most likely know that Seagate is, more or less officially, the world's top supplier of hard disk drives, as shown by the record shipments and revenues during the quarter ended on April 2. As such, if it was to speak upon the current situation of the HDD market, its words would definitely hold weight. What Seagate has to say, however, may come as somewhat of a surprise to some consumers.
Apparently, the performance of the HDD market during the aforementioned quarter was not as exceptional as it could have been, even though it exceeded expectations. In fact, Seagate reportedly stated that HDD shipments did not go any higher because of short supply. The storage-solution developer had initially predicted shipments of between 155 million and 160 million.
This led to certain inventory levels that were taken by surprise when 163 million units were sold in total. That said, the company believes that only between 155 and 160 million shipments will be reached in the second calendar quarter, even though Q2 usually fares better than Q1. This will occur because, even though demand will most likely be greater, inventories will simply not be able to meet it.
“With respect to demand in the March quarter, the total available market countered seasonal patterns and grew to approximately 163 million units, higher than our original expectation of between 155 and 160 million units. The 163 million units were likely short of unconstrained demand, as indicated by low inventory levels in our OEM and distribution channels,” Steven Luczo, chief executive officer and chairman of Seagate, said.
“We believe it is increasingly likely that our broader economic recovery in the United States and Europe will occur later in the calendar year, resulting in a potential for increase in demand above our current forecast of 650 million units to 670 million units. We still believe, however, that the HDD industry is constrained to a total output of around 670 million units given capacity, yields, component supply, technology transitions and capital deployment schedule for the remainder of calendar 2010,” Mr. Luczo stated.