The cryptocurrency Chia has had a big influence on the exhausting drive market. SSD demand doesn’t appear to have risen the identical manner, however each Western Digital and Seagate are reporting considerably greater demand. That’s based on executives from each firms, who spoke at a pair of separate occasions. Seagate CFO Gianluca Romano offered on the Bank of America Merrill Lynch 2021 Global Technology Conference, whereas Western Digital CFO Bob Eulau and VP Peter Andrew attended the Stifel 2021 Virtual Cross Sector Insight Conference (transcripts linked by way of SeekingAlpha).
In line with Seagate, the growth in demand has helped it preserve its factories full. Apparently, the exhausting drive industry added an excessive amount of capability in the previous few years and the elevated demand is filling manufacturing strains that might in any other case go idle.
Of us, we’ve lastly completed it. 9 months into the semiconductor scarcity, we’ve managed to determine two top-tier firms with manufacturing capability to spare. In line with Seagate, it’s evaluating the doubtless long-term influence of Chia and planning further CapEx spending to fulfill demand and fill product wants. The corporate expects general exhausting drive costs to enhance.
Eulau supplied further info on how WD sees these tendencies on the Stifel occasion. In line with him, the Chia community was roughly 1EB (Exabyte) at launch. It’s at the moment 20EB. Each Western Digital and Seagate are seeing elevated demand and income consequently; Seagate particularly mentions that that is an industry-wide uplift.
Western Digital notes that it’s at the moment reorganizing its NAND flash enterprise and its exhausting drive enterprise into two separate models. WD’s buy of SanDisk has not been a internet constructive for the corporate — Western Digital in 2021 is value lower than WD + SanDisk have been value individually — however the firm executives imagine a reorganization is essential to altering that state of affairs. The corporate argues that NAND and HDDs are literally complementary moderately than cannibalistic. This doesn’t apply to the patron market, the place SSDs have largely changed exhausting drives, however WD claims that it does apply to cloud computing firms, hyperscalers, and knowledge facilities extra usually.
In line with Western Digital, its BiCS5 expertise, with 112 layers, truly performs extra just like the 128-layer merchandise constructed by its opponents. WD says with the ability to improve bit density is extra necessary than pushing the variety of layers contained in the product. The corporate has not less than a theoretical level; the deeper the variety of layers, the tougher it’s to etch the ditch. That is why most high-layer SSDs at present are constructed from two NAND stacks versus etching a single trench that’s 176-192 ranges deep. Fewer layers with greater density is usually a good factor, assuming it doesn’t add an excessive amount of complexity of its personal.
In HDD-specific information, Western Digital expects to quickly ramp up manufacturing of its 18TB drives. Western Digital continues to consult with its manufacturing as “energy-assisted” moderately than specifying if its drives use HAMR (Warmth Assisted Magnetic Recording), MAMR (Microwave Assisted Magnetic Recording), or one thing altogether totally different.
Western Digital continues to spend money on each HAMR and MAMR, however says it is going to carry the applied sciences to market “when it makes industrial sense to take action.” This yr, the corporate’s focus is on boosting profitability and slicing bills. Neither WD nor Seagate has any near-term plans to construct new exhausting drive factories. Each firms are cautious of investing in new manufacturing proper now given long-term tendencies in storage. Seagate had unused manufacturing strains already, till Chia hit.
As long as Chia stays confined to exhausting drives, the patron storage market shall be nice — not less than, assuming you don’t want a number of 16-20TB HDDs. Each firms are obsessed with Chia, so we’ll see how demand shapes up long run.