Cautious Optimism Returns to the Disk Drive Industry After Brutal Business Year In 1998
SANTA BARBARA, Calif. (BUSINESS WIRE) - The disk- drive industry is showing some signs of life after a disastrous year in 1998.
After a record 1997, expectations were high going into 1998, but the combination of the Asian economic crisis and a serious oversupply of drives and components led to a disappointing year that may change the focus on how the disk-drive industry conducts business. Although 1998 was a major disappointment, the future looks considerably brighter for both the components and drive manufacturers.
According to the "1998/1999 Rigid Disk Drive Head/Media Market and Technology Report," drive shipments will reach 141.9 million units in 1998, an increase of 8.5 percent from 1997. Head and media numbers were also up 7 percent - 8 percent in 1998.
Entering 1999, inventories have been reduced with most of the 165.3 million units expected to be shipped in 1999 coming from new production. The reduction of inventories is one of the primary reasons for optimism among drive manufacturers as we enter 1999.
The future picture appears to be even rosier as disk drives begin to move beyond traditional computer storage uses and into new applications such as set-top boxes, video-on-demand systems, and home servers as well as small form-factor devices such as digital cameras and personal-data assistants.
The transition to MR heads was completed in 1998. Of the 913 million heads shipped in 1998, 79 percent were MR and 4 percent were GMR heads. By the year 2001, head production will be made up of only 2 percent Thin Film Inductive with the other 98 percent being split almost evenly between MR and GMR production.
With 25 percent of the market, IBM captured the No. 1 position among head manufacturers in 1998. IBM's gain came primarily at the expense of 1997's leader, Seagate, which lost 13 percent of its market share in 1998. Seagate did retain its No. 1 position as a media supplier with 23 percent of the market.
The market shares for heads and media for 1998 were:
HEADS
IBM 25%
Seagate 20%
TDK-SAE 15%
Read-Rite 8%
Yamaha 7%
Fujitsu 6%
Quantum 3%
Others 16%
MEDIA
Seagate 23%
IBM 9%
Showa 9%
MCC 9%
HMT 8%
Fuji 7%
Komag 7%
Hoya 5%
Others 23%
By the year 2001, component production is expected to increase 40 percent - 45 percent over 1998 levels.
The "1998/1999 Head/Media Market and Technology Report" reviews the 1998 drive, head, and media markets as well as magnetic recording technology and provides forecasts through the year 2001.
Subjects covered in the report include disk drives, interfaces/controllers, solid-state disks, disk arrays, optical storage, semiconductor storage, magnetic-storage technology, disk- drive developments, optical/magnetic technology, magnetic-head technology, component technology, and magnetic-media technology.
The report also includes company profiles for the magnetic head and media manufacturers.
The "1998/1999 Head/Media Market and Technology Report" has just been released and can be ordered for $975. An executive summary and table of contents are available on request.
Peripheral Research Corp. may be contacted at 805/563-9720, or submit requests by fax at 805/563-6020. The company profile can be seen at www.silcom.com/~prc.
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