14 DAY TRIAL // Considering the weakening global demand for PCs and other electronic products, iSuppli forecasts that hard disk drive shipments will remain flat during the fourth quarter of the year, if not dropping compared to the previous quarter. The firm has issued several scenario forecasts for global HDD shipments in 2008 and 2009, and some of them are not too optimistic.
According to iSuppli's most-likely forecast, global HDD shipments should reach 157.5 million units in the fourth quarter, which would be essentially flat compared to the 158.3 million units shipped during Q3. The forecast also says that overall HDD shipments in 2008 will reach 593.2 million units, up by 14.93 percent compared to 516.2 million units in 2007.
A pessimistic scenario shows fourth quarter shipments potentially as low as 149.4 million units, which would reveal a 10 percent drop compared to the earlier forecast made in Q3. If this scenario proves true, the 2008 HDD shipments would only be of 585.1 million units, up 13.4 percent from 2007. Back in September, the firm said that HDD unit shipments were expected to rise 4.9 percent sequentially in the fourth quarter and 16.6 percent for the entire 2008.
“iSuppli has reduced and rebalanced its 2009 forecast for PC unit shipments and is reducing its outlook for sales of HDD-equipped consumer electronics products,” said Krishna Chander, senior analyst of storage systems for iSuppli. “This is having a negative impact on HDD shipments, regardless of which scenario wins out. However, iSuppli for now is sticking with its optimistic outlook, given that the forecast fits in with recent predictions for the leading HDD makers: Seagate Technology LLC and Western Digital Corp (WDC).”
Back in October, Seagate said that the HDD industry would ship 156 million units in the fourth quarter, while WDC forecast about 161.7 million. 2008 is nearly over and things have almost settled down, yet most of the industry players are looking at 2009 with great uncertainty.
An optimistic outlook points towards a 6.8 percent unit growth, while the pessimistic one points at 4.3 percent. If things turn to the optimistic side, the market has good chances to recover by the second half of 2009, using average selling prices (ASPs). Either way, the growth expected in HDD shipments and revenue in 2009 should be backed by demand from the notebook PC and enterprise server segments.
“Although shipments seem to be robust in this uncertain economy, the revenue picture is more subdued,” Chander said. “OEMs that traditionally purchase more components in the fourth quarter are reducing their procurement budgets, or are buying with low incoming inventory - resulting in reduced pricing for HDDs.”
Spinning platter makers do not have to worry about the SSD danger for the next year, since tight consumer budgets are expected to slow the adoption of the new technology. Notebook PC buyers are rather looking for value and go for lower-priced HDDs. Even so, SSDs may reenter the battle towards the end of the next year, when the market is expected to start recovering.