A year ago the people and the industries of Thailand were significantly impacted by floods. Before the disastrous flooding Western Digital was the number one HDD maker and supplier in the world. Seagate, with its factories on higher ground saw a quicker recovery and took number one spot from Q4 2011 onwards. Now market analysts iHS iSuppli reports that Western Digital (WD) is again top HDD dog. However both Seagate and WD have been enjoying record shipments of their HDDs.
In Q2 2012 WD shipped 71 million HDDs, 10 per cent more than in Q1. This number gave it a 45 per cent market share. Seagate shipped just under 66 million units during the same period, a 42 per cent share of the market. The third player, Toshiba, shipped a shade over 20 million units accounting for 13 per cent of sales.
Fang Zhang, analyst for storage systems at iHS said “Western Digital lost its No. 1 unit shipment ranking to Seagate in the fourth quarter of 2011 after flooding in Thailand damaged its HDD manufacturing facility,” he continued “The company now has fully recovered from the disaster, allowing it to sharply increase shipments of HDDs for notebook PCs, up 28 percent from the first quarter. Western Digital is on track to retain the top spot in shipments and revenue for the third quarter.”
WD acquired Hitachi Global Storage Technology earlier in the year which has helped bolster its current top spot in the market. iHS also predict that WD will continue to sit atop the chart in Q3 but the race for top spot in Q4 will be extremely tight.
Both Seagate and WD seem to have been milking the market following the flood disaster. Seagate’s gross margin fell to 33 per cent in Q2, from 37 per cent in Q1. Both figures are much better than the pre-flood level of just over 19 per cent. WD likewise had a slight drop in margin from 32 per cent to 31 per cent yet never made more than 26.2 per cent in its pre flood history. We will likely see pricing pressure bringing those margins down further in the coming months. In June we reported on iHS iSuppli’s prediction that HDD prices would remain above pre-flood levels until 2014. Perhaps now that the manufacturers have “fully recovered” we can expect prices to drop a little faster.