Seagate sees big drive capacity jump coming
Doesn't fear NAND encroachment
NAND Encroachment? Have no fear
Why will drive shipments be unaffected by customers deserting spinning rust for flash chips? Seagate still expects its hybrid Momentus XT, the disk drive with a 4GB NAND cache, to go gangbusters with a million drives shipped a quarter by the end of 2011. These are drives that are chosen instead of SSDs. Secondly, the installed PC base will rise and need bulk capacity disk drives to store all the digital media and general file stuff users accumulate. But these two factors are not the main thrust of Seagate's argument; that is a NAND manufacturing capacity one.
Even though users might wish to and could afford to adopt SSD storage on their computers the lovely stuff can't be made in sufficient quantities. Seagate quotes an industry estimate that there will be a total notebook HDD capacity of 95EB (exabytes) shipped in 2011 with 69EB in 2010. It says - you can almost see the glee on its face - that just 11EB of flash was made in 2010, with around 93 per cent of shipments used for smartphones and other embedded applications. This left a pathetic 0.77EB (770PB) for notebooks, which would have allowed around one per cent of notebook HDD storage to be replaced by SSDs last year.
There will be a minor boost in NAND fab capacity this year, maybe enabling 2EB to be used for notebooks. Any demand for notebook SSDs over this amount will cause shortages which will send prices up, ultimately crushing the demand. What Seagate seems to be saying is: "NAND flash may well be preferable to HDDs for notebooks but it's supply-constrained so we are alright for the time being."
It also claims there are high failure rates in the enterprise SSD market, up to an amazing 35 per cent, so there won't be as much gulping of fast Fibre Channel and SAS enterprise drives by flash as expected. Any flash impact on Seagate's revenues will be much less than some analysts think, and Seagate will gain a revenue boost from having higher capacity drives on the market before anybody else.
Apparently, Seagate will used its own heads in these new disk drive products and not TDK ones. Another interesting point is that the Seagate/Samsung collaboration will result in a third generation Seagate SSD in the second half of 2011. Although Samsung will have helped developed the product, Seagate has sole selling rights to the product for 18 months - after which Samsung can sell any competitive offering it wants to. Whoever negotiated that partnership contract did a good job for Seagate, and Samsung must expect Seagate to ship land-filling amounts of the stuff to make the contract acceptable in Korea.
Seagate may be under-estimating the NAND fab capacity increases coming. EE Times is running a story saying that Hynix, Micron, Samsung, and Toshiba are all increasing fab capacities, with an industry analyst suggesting total bit production could rise 71 per cent in 2011 over 2010. This does not square with Seagate's numbers. ®