Might be time to get back into Seagate, at least for a quick trade. Stock closed at $14.97 yesterday (Wed).
Hard drive supply gap estimated to widen to 15-20 million units in 3Q11
Erica Yen, Taipei; Joseph Tsai, DIGITIMES [Thursday 23 June 2011]
digitimes.com
Global hard drive demand in the third quarter is estimated to reach as high as 180 million units with the five major hard drive makers only capable of supplying 160-165 million units, increasing the supply gap from a shortage of 10 million units in the second quarter, according to sources from hard drive makers. The gap is unlikely to be filled before the end of 2011.
The strong demand in the third quarter will be mainly due to the IT product replacement trend in the enterprise market, as well as the increasing storage needs of cloud computing servers.
Although the supply shortage of hard drives will help maintain prices, hard drive shipments to enterprise servers, which were originally expected to strongly benefit makers, may face a decline. Currently, 50% of hard drive supply is used in desktops, notebooks and netbooks, with cloud computing servers only accounting for less than 10%. But since demand for Internet data storage is growing, hard drive makers are turning more aggressively toward the server hard drive market, which has higher profitability.
Currently, the top-10 notebook brand vendors have close to 80% of their models using either 320GB or 500GB hard drives, with the proportion at 5:5. In the third quarter, the proportion of 320GB and 500GB hard drive is expected to shift to 4:6 with 250GB models only having a very small percentage. 640GB and 750GB capacities will mainly be used in enterprise and gaming models and are unlikely to grow to become the mainstream specification in 2011. |
