Storage industry will maintain growth in 2011

According to IHS iSuppli, global shipments of storage products, including hard disk drives (HDDs), are expected to grow by more than 10% in 2011 due to strong corporate demand.

Total shipments of HDDs and solid-state drives (SSDs) will grow to 547.2 million in 2011, an increase of 10.9% from 493 million in 2010. As the global economy recovers, the demand for storage products will increase, and both HDDs and SSDs will benefit.

HDD will continue to maintain its dominance. It is expected that shipments will reach 532.7 million in 2011, an increase of 9.5% from last year's 481.6 million. However, the growth of SSD will be even stronger. Although relatively small compared with HDD, SSD shipments this year will soar by 111.6% to 14.6 million.

The third area is very small, is the optical drive (ODD), shipments will also show healthy growth, but in 2011 its operating income growth will be inferior to the above two main areas, mainly due to the decline in the price of Blu-ray and DVD drives. Both Blu-ray and DVD drives use ODD.

The chart below shows IHS iSuppli's shipment forecast for the storage industry, broken down by product type.

From a consumer point of view, the largest storage news that happened in the industry last year was that Apple MacBook Air laptops used SSDs. The $999 entry-level model with 11.6-inch screen and 64GB of storage capacity has prompted other PC makers to cut prices on similar SSD slimbooks, and as average selling prices return to normal levels, relatively expensive SSDs change for consumers. It's more feasible. IHS iSuppli Corp. predicts that SSD will grow steadily in 2011 as competitors compete to develop products similar to MacBook Air. For example, Dell hopes to double the output of laptops equipped with SSDs to more than one million units this year.

As for HDD, corporate demand is expected to remain strong due to a number of factors, such as the increased use of server updates, virtualization, and the construction of cloud storage infrastructure by major storage vendors. The server update is the process of upgrading the server as the device ages. IHS iSuppli’s forecast shows that despite the growth in tablet devices, there has been no decline in the use of HDDs in portable computers.

Especially for 2.5-inch HDDs, market share will increase as notebook computers and corporate segments are expected to grow faster. Since the importance of desktop computers is expected to decline from 2011, 2.5-inch HDDs will exceed 3.5-inch products from this year.

HDD supplier Western Digital will continue to use Seagate's lean infrastructure and supply chain to continue capturing market share from Seagate, although the latter maintains its leading position in revenue.

However, because there is no disruptive technology, Seagate may lose more shares, and its share will not only flow to Western Digital, but will also flow to other competitors who occupy its territory, such as Samsung Electronics, Toshiba and Hitachi GST.

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