Following a historic 33% decline in shipments year over year (YoY), the HDD market in 2Q 2022 seems to be on the verge of an apocalypse - or at least standing at the doors to purgatory. As reported by Storage Newsletter, weakening demand on the client side prompted this faltering shipment situation for one of the longest-lived storage mediums. Density increase achievements aren't enough to buoy this particular market.
HDD shipments across the various market segments (client and enterprise) only totaled 45 million units - a far cry from the 2010 peak of 651 million units (an average of 162 million units per quarter).
| Vendor | HDDs shipped (million units) | Q/Q change (%) | YoY change (%) | Market Share |
| Seagate | 19.8 - 20.6 | -10,4% / -13.8 | -26.9% / -29.7% | 44.3% - 44.7% |
| Toshiba | 8 - 8.6 | -14.3% / -20.2% | -38.5% / -42.8% | 18.5% - 18.1% |
| WDC | 16.5 - 17.3 | -12.4% / -16.5% | -31.4% / -34.6% | 37.2 % |
| Total | 44.30 - 46.50 | -11.9% / -16.0% | -31.0% / -34.2% |
Enterprise HDDs remained relatively flat, with a slight reduction in demand compared to the same period last year. But that's a market that's been consistently growing for years and which is sure to remain growing as Cloud and High Performance Computing) environments require cheap, low-power, high-density storage that can cope with the increased digitization of our lives and scientific achievements.
The biggest change was in the 2.5" form-factor, which saw a staggering 40% drop quarter-over-quarter (QoQ) to around 11 million units. The drop is explained by weak retail shipments and a softening mobility market that has largely shifted to flash-based storage solutions.
The second highest loss in the HDD market is in the Desktop/Consumer Electronics segment, where shipments fell by over 30% to 17 million units. Particular demand weakness was seen in the surveillance, PC and retail sectors. This demand reduction relates not only to macroeconomics; there are more important things to spend one's money on when inflation is at 8.6% in the US alone. But it also stems from the demand decrease in the PC space, whose shipments should reach a yearly decrease of 8.2% compared to 2021. We should also note that storage-based cryptocurrency Chia launched around March of last year, prompting a spike in demand for HDDs throughout Q2. There's no data on how exactly this impacted overall HDD shipments, so it's hard to gauge how responsible (at all) it is for increasing the YoY delta.
"SSDs killed the HDD star" is another likely element, as price reduction for SSDs is certainly increasing their value proposition for system integrators and consumers. NAND manufacturers dropped wafer prices for TLC and QLC NAND by 8~13% in Q2 2022, and a further 5~10% reduction is expected for Q3. With lowered SSD pricing and quality of life improvements compared to HDDs with their winding, spinning platters and lesser durability, the value proposition for the consumer side is jumbled even further.
