invest in new technologies or divest in market share · 2/10/2009 · invest in new technologies...

Invest in New Technologies or Divest in

Market Share (Hard Disk Drive and Component Companies

Face a Critical Decision to Grow or Die)

Thomas CoughlinCoughlin Associates

www.tomcoughlin.com© Coughlin Associates, 2010

Outline• Slowing areal density growth• Technology development and capital

equipment spending• HDDs vs.solid state storage--potential HDD

revenue loss• Joint development for AD growth• New concepts for storage tiering and system

architecture

© Coughlin Associates, 2010

Much of the data in this presentation is derived from the 2010 Hard Disk Drive Capital Equipment and Technology Report, Coughlin Associates, www.tomcoughlin.com

COMPARISON OF PRODUCT ANNOUNCEMENT TRENDS VS AREAL DENSITY GROWTH RATES.

10

100

1000

Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010

Gbi

ts p

er s

quar

e in

ch

100 % CAGR

80% CAGR

60% CAGR

40% CAGR

20% CAGR

HDD Product


2010 HARD DISK DRIVE CAPITAL EQUIPMENT MARKET & TECHNOLOGY REPORTCoughlin Associates

Product introduction AD growth appears to be slowing to ~30% annually

HDD AREAL DENSITY GROWTH AND PROJECTIONS.2010 HARD DISK DRIVE CAPITAL EQUIPMENT MARKET & TECHNOLOGY REPORT

Coughlin Associates

90 95 100 105 110 115

Production Year

Area

l Den

sity

GIg

abits

/in2

HDD ProductsPBMProjectionHDD Productsw/PMR

HDD Areal Density Perspective

1st MR Head

1st GMR Head

2000 2005 2010 2015

Copyright Ed Grochowski

60% CGR

100% CGR

1st AFC Media

PerpendicularRecording

10 3

102

10

10 4

25% CGR

4K Region40% CGR

Patterned Media,HAMR HeadsShingled Write, CPP Head

1

10 -1

10-2

TMR Head

285 Million X Increase

40% CGRMax.

20% CGRMin.


Technologies for Areal Density Growth

• Shingled Write

• Heat Assisted Magnetic Recording (HAMR)

• Patterned Media

• Dual Stage Actuators

2000 2002 2004 2006 2008 2010 2012 2014 2016

Production Year

0

400

800

1200

1600

0

HDD

Uni

ts, M

illio

ns

HDD Production RoadmapTechnologies Introduction

PMR HeadsTMR Heads

8 Inch Head SubstratesTFC

PBM

HAMR

Imprint Tooling

AFC Media

DTR?CPP Head ?

E E E

Shingled Write

4K Sectors

Ed Grochowski/Tom Coughlin



DSA

HDD COMPANY REVENUE AND INDUSTRY CAPITAL EQUIPMENT SPENDING ESTIMATES (2007 TO 2015).

Year Total HDD Est. Revenue

Total HDD Industry Capital Est. Equipment

Spending

% Capital Equipment

Spending/Revenue

2007 $32.6 B $2.28 B 7.0% 2008 $32.9 B $2.37 B 7.2% 2009 $30.2 B $1.35 B 4.5% 2010 $34.8 B $3.01 B 8.6% 2011 $41.5 B $3.64 B 8.8% 2012 $48.5 B $4.23 B 8.7% 2013 $54.2 B $4.83 B 8.9% 2014 $60.5 B $5.66 B 9.4% 2015 $67.6 B $6.77 B 10.0%

Total (2007-2015)

$402.7 B $34.14 B 8.1% (avg)



CAPITAL EQUIPMENT SPENDING VS. NUMBER OF HARD DISK DRIVES TRENDS.

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

1999

2001

2003

2005

2007

2009

2011

2013

2015

Cap

ital/D

rive

0

200

400

600

800

1000

1200

1400

Tota

l Driv

e N

umbe

r (M

)

Capital/Drive# Drives



AD Slowdown Assumed

AVERAGE $/GB FOR HDDS AND FLASH MEMORY.

1990 1995 2000 2005 2010 2015Year

0.01

0.1

1

10

100

1000

10000

100000

Pric

e/G

Byt

e, D

olla

rs

DRAMFlash

DesktopMobile

Enterprise1"

Average Retail Prices of Storage

32 GB Flash

Desktop HDD

Mobile HDD

1 " HDD

DRAM/Flash

6 GB Microdrive

1.5TB Desktop

250 GB Mobile Drive

300 GB Server Drive 15K

750 GB Desktop

2TB Desktop

Enterprise HDD


Ed Grochowski, 2010

Current Projections for HDDs and SSDs

0

10

20

30

40

50

60

70

2008 2009 2010 2011 2012 2013 2014 2015

Units

Shi

pped

(M)

HDD Enterprise

HDD ATA Enterprise

SSD Enterprise

0

100

200

300

400

500

600

700

800

2008 2009 2010 2011 2012 2013 2014 2015

Units

Shi

pped

(M)

HDD Mobile PC

SSD Mobile PC

HDD Data—Coughlin AssociatesSSD Data—Objective Analysis

Enterprise Applications

Mobile Computers


© 2010 Coughlin Associates 10

Historical Symbiotic Relationship Between Flash and HDDS

• Almost all consumer flash applications require HDDs– Music and video

players– Cameras

• Consumer flash applications have created greater demand for HDDs– Downloads– Uploading photos

and videos– Backup of Consumer

Content0

10

20

30

40

50

60

2008 2009 2010 2011 2012 2013 2014

HD

Ds

Supp

ortin

g C

onsu

mer

Fla

sh

(M) u

nits

)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Perc

enta

ge o

f Tot

al H

DD

s Sh

ippe

d

Flash Supporting HDDs

Percentage Total HDD Shipments

White Paper: Flash and HDD: Symbiosis or Survival of the Fittest? (Coughlin Associates & Objective Analysis, 2009)

Historical HDD Losses to Flash Memory• HDD were replaced in mobile A/V players for the most

part– Compressed content could fit on a less expensive quantity

of flash memory– Mobile use benefited from rugged a storage device– Killed 1-inch HDDs, 1.8-inch drives down considerably

• SSD’s are being used as Tier 0 enterprise storage but also replacing some HDD arrays used to achieve performance at the expense of capacity– Expensive enterprise HDDs will be more vulnerable to flash

memory replacement from $/GB considerations if AD slows

• HDDs replaced by SSDs in remote caching operations, such as edge content delivery servers


Potential Loss of HDD Shipments

• There are read and possible write performance advantages with flash memory over HDD, depending upon the data traffic

• Advancing SSD and flash device controller technologies are making endurance and reliability issues less of a problem

• Still challenges to continue flash memory advances as feature size is reduced, but there are other solid state (SS) storage technologies in the wings

• HDDs face increasing competition from SS storage technologies and maintaining competitive $/GB is critical to survival

• An extended period of low annual AD growth will hit potential HDD revenues

• It may be better to make apparently expensive capital equipment and technology investments to continue AD growth than lose that potential revenue (and market share)


SSD and HDD Steady State IOPS



Assumptions in Loss Estimate Calculation

• Assume 5% annual disk drive ASP decline from 2010 through 2015• Assume 40% annual flash $/GB decline from 2010 through 2015• Assume 20% annual HDD AD increase from 2010 through 2015• All losses calculated here are driven by $/GB only, other factors are not considered

through may be important for some applications• Flash Pricing derived from information from Jim Handy, Objective Analysis

HDD/Flash $/GB Ratio Reduction in HDD Demand10.0 05.0 0.50%3.0 10%2.0 20%1.5 30%1.0 50%0.5 70%0.3 90%

2009 SSD Numbers 2009 HDD Numbers

Application ($/GB) Application ($/GB)Mobile Computer $5,73 Mobile Computer $0.32Desktop Computer $5.73 Desktop Computer $0.10Enterprise $7.24 Enterprise $0.63

This may be optimistic!Ultimately a 1:1 $/GB ratio could destroy HDDs.

Enterprise $/GB Trends vs HDD AD Growth


$0.01

$0.10

$1.00

$10.00

2009 2010 2011 2012 2013 2014 2015

$/G

Bp

Flash

HDD (+50%)

HDD (+40%)

HDD (+30%)

HDD (+20%)

HDD (+10%)

Estimated HDD Unit Shipment and Revenue Loss with 20% AD Growth from 2010-2015

400,000 500,000 600,000 700,000 800,000 900,000

1,000,000 1,100,000 1,200,000 1,300,000 1,400,000 1,500,000

2007 2008 2009 2010 2011 2012 2013

Uni

t Shi

pmen

ts

Total (Current)

Total (20% CAGR)

Potential Revenue Loss from 2010 through 2015 is estimated to be over $11 B

on 4% unit reduction

Application unit losses

Enterprise 7.9%Enterprise ATA 0.1%Desktop 0.0%Mobile CE 3.9%Static CE 0.1%Mobile PC 6.3%


HDD Companies and Suppliers Must Work Together to Enable AD Growth

• Storage Technology Alliance– Seagate, Western Digital, Hitachi GST and other HDD

companies and equipment suppliers are to work together to enable the next generation of HDDs and maintain significant AD growth

– By developing some common evaluation of technologies and perhaps production tools, industry technology growth can be accelerated

• Perhaps HDD companies should also work together on storage tiering and flash/HDD symbiosis (such as hybrid drives) as well, to make sure that HDDs stay relevant to the next generation of enterprise, computer and consumer devices


Conclusions• HDD areal densities are slowing• Technologies for extending areal density growth require

significant technical and/or capital equipment investment• Solid state storage increasingly offers reliable performance

improvements and $/GB decline in SS storage may continue• HDD potential revenue will suffer if AD CAGR does not

maintain reasonable levels (40% CAGR or so)• The HDD industry must work together to implement these

new technologies • HDD companies must consider working together to embrace

storage tiering and hybrid architectures for enterprise, computers and consumer applications


Much of the data in this presentation is derived from the 2010 Hard Disk Drive Capital Equipment and Technology Report, Coughlin Associates, www.tomcoughlin.com


Thanks

invest in new technologies or divest in market share · 2/10/2009 · invest in new technologies...

Documents