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IHS iSuppli: Record Hard Drive Shipments Coming As Thailand Flood Impacts Fade

A growing storage market, demand for Ultrabooks and Windows 8, and fading impacts from last year's Thailand floods means record hard drive shipments in 2012 and beyond, according to IHS iSuppli.

Hard drive shipments in 2012 are expected to return to record levels, with growth over the next few years to remain strong, now that the impact from last year's disastrous Thailand floods have receded along with the water that covered the country, according to a new report.

IHS iSuppli, an El Segundo, Calif.-based analyst, on Thursday reported that growth in the consumer and enterprise business along with the advent of the new Windows 8 operating system and a new crop of Ultrabooks will result in hard drive shipments of 524.0 million units for 2012, up 4.3 percent compared to the 502.5 million units shipped in 2011.

Those numbers reflected hard drive shipments to the PC, server and storage market and do not include hard drives targeting automotive, external hard drives or DVR devices, IHS iSuppli reported. Shipments in that part of the market will actually slip in 2012 compared to 2011, the analyst firm reported.

[Related: Hard Drive Prices To Remain High Until 2014: Report ]

The record number of expected hard drive shipments in 2012 show just how far the hard drive industry has come since the massive Thailand floods of late 2011 destroyed as much as a third of the world's hard drive manufacturing capacity.

Because of those floods, hard drive supply constraints had been expected to severely impact the enterprise storage market.

However, 2012 has seen the hard drive vendors fully recover their manufacturing capacity, either through rebuilding their Thailand manufacturing base or by building new facilities in other countries to spread the risk.

IHS iSuppli said that growth in PC shipments and demand from a surge in interest in Microsoft's new Windows 8 operating system and in Ultrabooks will help drive hard drive shipments going forward. The analyst firm expects shipments to reach 537.9 million units in 2013, 555.3 million units in 2014, 563.5 million in 2015 and 575.1 million in 2016.

NEXT: Hard Drive Demand Can Only Grow


Todd Swank, vice president of marketing at Nor-Tech, a Burnsville, Minn.-based system builder, said his company is seeing growing demand for hard drives, but more from a push to upgrade PCs from Windows XP to Windows 7 rather than an upgrade to Windows 8.

"I can't say a lot of customers plan to upgrade to Windows 8," Swank said. "Enterprises are slow to adopt new operating systems. But, a lot of them have recently upgraded from Windows XP to Windows 7. Everybody skipped Vista."

As a result, 2012 sales of client PCs so far grew significantly compared to sales in 2011, Swank said. However, he tempered the impact on hard drives from that growth by noting that there are fewer competitors than in the past as several system builders dropped out of the market.

Even so, Swank said, the storage business can only grow, making demand for hard drives rise over time.

"The demand for storage is growing," he said. "People are looking for bigger servers, bigger hard drives, bigger storage, bigger data centers. They need backups, and backups of backups. It's a great time for storage."

PUBLISHED SEPT. 27, 2012

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