Turn Around
This data is from the C4Q 2023 HDD shipments from the February 2024 Digital Storage Technology Newsletter.
Total HDD shipments in C3Q 2023 were up 0.87% compared with C3Q 2023 (28.9M versus 28.6M). This quarter broke the downward quarterly trend since Q1 2022. Total exabytes shipped in C4Q 2023 were up about 9.5% from C3Q 2023. Estimated HDD revenues were up about 9% in C4Q compared to C3Q. HDDs joined other memory and storage technologies in beginning to recover from lower demand through much of 2022 and 2023.
Seagate said their HDD revenue was $1,384 B in the quarter with Mass Capacity HDDs accounting for 77% of this revenue. 73% of the company’s product was sold directly to OEMs. Total storage capacity shipped was 95.1EB with 83.2EB for Mass Capacity and 65.1TB for Nearline HDDs, the balance of 12.0EB was shipped for legacy applications. The average HDD capacity was 8.2TB with Mass Capacity average capacity at 11.9TB and legacy average capacity at 2.6TB. The company shipped about 11.6M units in the quarter with an ASP of $119.3.
Western Digital reported that their C4Q 2023 total HDD EB shipments increased by 14% from the prior quarter (I estimate this at 102.6EB) and that they had shipped 67EB of nearline storage. They also said that shipped 2.7M client compute units, consumer shipped units were 2.2M and data center (cloud HDD unit shipments) were 5.9M. That means the average capacity of their nearline HDDs was about 11.4TB. The company’s ASP was $122 (up from the prior quarter at $112). Total HDD revenue was $1.367B. Cloud storage was about 35% of the company’s revenue in this quarter (compared to 32% in the prior quarter).
In January 2024 Seagate formalized their introduction of 3+TB/disk HAMR based HDDs (Seagate calls these Mozaic 3) for nearline (datacenter and enterprise) applications. Discussed in our article about C3Q 2023, this raises the aerial density of HDD magnetic recording to 1.5-1.6Tbpsi, setting a new record for magnetic recording density. As Dave Mosley said, “Moziac is intentionally named to describe the fusion of innovative technologies including Seagate’s unique implementation of HAMR that collectively enabled us to extend our aerial density leadership. As we shared in the past, growing aerial density is the most efficient way to enable data center operators to scale mass capacity storage to lower their TCO and to advance their sustainability targets.”
Seagate plans to scale its Mozaic technology to 4+TB/disk for products in the second half of 2025 with 5+TB/disk products targeted for 2027. This raises the bar on HDD capacity that Western Digital and Toshiba will be scrambling to match. The figure below shows the history of product areal density introductions since 2000, with a recent uptick due to HAMR HDDs.
HDD Aerial Density of Shipping Product History
We saw an 9.6% average sales price (ASP) increase from C3Q 2023 to C4Q 2023 following a 12.2% quarter over quarter decrease in C2Q 2023. The multi-year ASP trends are shown in the image below. Fluctuating demand for high capacity nearline HDDs has been driving varying HDD ASPs in the last few quarters.
HDD Average Sales Price History
The figure below shows the HDD market share for 2023. Toshiba market share in C4Q and C3Q 2023 was about 22%, reflecting additional market share gain in the second half of the year.
2023 HDD Market Share
The figure below shows our adjusted projections for total shipments of HDDs for a high projection, a median projection and a low projection. Total HDD unit shipments will likely continue to decline for the next year or so, due to the continuing decline in legacy HDD applications (such as PCs and consumer devices). However high capacity nearline HDD growth should continue in 2024 and in the future, driven for the demand for lower cost secondary storage in data center to support large amounts of incoming data to support AI training and other applications. This should raise the number annual shipping HDDs by 2027.
History and Banded Projections for HDD Shipments
However, after cutting back production at the HDD plants and the suppliers to these plants during the storage recession of 2022 and 2023 it may take a few quarters to get HDD production volume up again to meet demand, should there be even moderately higher demand for HDDs in 2024. Thus, there could be short term shortages in 2024 if HDD demand recovers (likewise with SSDs as well).
Total HDD unit shipments in C4Q 2023 were up just under 1%, marking a turn around in quarterly HDD demand, which was in quarterly decline since Q1 2022. Capacity shipments were up 9.5% from the prior quarter and revenues were up about 9%. HAMR HDD introduction will lead to interesting industry dynamics over the next year or more.
