After a rocky few years for the hard drive industry, the AI craze is renewing demand for mass data storage. To meet these needs, manufacturers have ambitious plans to increase hard drive capacity.
The past few years have proven challenging for hard drive manufacturers, with Western Digital, Seagate, and Toshiba all posting large declines in shipped units. Now, with demand for nearline storage picking back up, each of the Big Three have hit the 30TB milestone, and have ambitious plans to further ramp up hard drive capacity.
Western Digital, Seagate, and Toshiba have all laid out capacity roadmaps for the years ahead, with hyperscalers in mind. The long-awaited mass production of HAMR drives is finally a reality, and the need to store datasets for AI training is likely to increase demand for high-cap drives moving forward. Here’s a look at the current state of high capacity hard drives, and the factors which will shape their future.
Unit Shipments: A Turning Point
2022 and 2023 were hard years for hard drives. HDD unit shipments almost halved in 2022, and this was followed by declines in revenue for the three largest HDD manufacturers. In 3FQ2023, Seagate saw a 33.6% y-o-y decline in revenue, and a staggering loss of $433 million in profits. Western Digital saw a 35% y-o-y decline in revenue, and a $572 million loss in profits. In addition, Toshiba saw its full-year net profit fall by 35%, including a 30.4% decline in operating profit.
The declines in overall HDD shipments were partly due to the collapse of the market for consumer hard drives, but the decline in nearline sales was likely due to a supply chain glut. In any case, it was soon clear that the problem wasn’t HDD per se. Flash manufacturers suffered as well, and processor sales saw their biggest decline since 1984.
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However, demand has finally picked back up. According to TrendForce, demand for high-cap drives spiked in the second half of 2023, leading to price increases of 10-20%. In 2FQ2024, Western Digital saw a q-o-q revenue increase of 11%. Seagate saw a revenue increase of 7% during the same period.
Analyst Tom Coughlin noted that in 4Q2022, unit shipments were up .87%. That’s a small increase, but also a welcome sign of a long-anticipated turnaround, as it marked the first uptick since 1Q2022. Nidec, which holds 70% of the HDD spindle motor market, has also seen sales of its spindle motors rise 18% y-o-y to ¥23 billion (around $147 million).
For high-cap HDD, this year looks like a turning point. But that’s not the same as a full-blown comeback. What is the forecast for high-cap drives in the years ahead?
Predictions for High-Cap Growth
While Tom Coughlin thinks the continued decline in legacy HDD applications will keep numbers of units shipped from soaring anytime soon, he’s more optimistic about high-cap drives. Coughlin predicts that “high capacity nearline HDD growth should continue in 2024 and in the future”. The reason? Secondary storage is needed to support a massive influx of data, itself necessary to support AI training. He predicts that by 2027, this should boost the number of annual HDDs shipped.
Wells Fargo analyst Aaron Rakers also sees a sunny future for high-cap nearline drives. He predicts that shipped HDD capacity will grow at a 19% CAGR through 2027, compared to a 21% CAGR for SSD. By 2027, he predicts that nearline will constitute 93% of HDD revenue.
Onward and Upward
The recent turbulence in demand hasn’t discouraged the Big Three from making big plans to ramp up hard drive capacity. With 30TB drives in the bag, they’ve set their sights on more ambitious milestones, and are developing innovative tech to reach them.
HAMR Time: Seagate’s Mozaic 3+
Seagate was the first company to cross the 30TB finish line. Its Mozaic 3+ HDD platform incorporates 30TB+ drives making use of heat-assisted magnetic recording (HAMR) drives. These Mozaic drives utilize superlattice platinum-alloy media, which enables smaller magnetic grains and denser recording. Seagate has also insisted that these HAMR drives are just as reliable as those using traditional perpendicular magnetic recording (PMR).
“Seagate’s innovative areal density breakthrough is timely and will enable it to deliver increasingly higher capacity hard drive products for many years”, said IDC Research VP John Rydner. “Hard drive areal density improvements are critical for economically and efficiently expanding the installed base of hard drive-based mass storage, especially in data centers”.
In its latest roadmap, Seagate plans to leverage HAMR to create Mozaic products with ever-greater density, with 4TB and even 5TB platters on the horizon. This will enable 40+TB hard drives by 2026. If all goes well, Seagate will have reached the 50+TB milestone by 2028. While ambitious, the current roadmap does mark a shift from its previous plans, which would have seen 40TB drives released in 2024-5, and 50+TB drives in 2025-6.
For years, Seagate’s promise has been that HAMR is the key to mass producing high capacity drives, which is in turn necessary if HDD is to remain the cheaper option for hyperscalers moving forward. High-cap HAMR isn’t just another milestone: the long-term of Seagate may depend upon its success.
Tom Coughlin, at least, is optimistic on HAMR’s prospects, and anticipates that by at least 2027, each of the big three HDD manufacturers will produce HAMR drives in volume. In the same year, he predicts more than half of HDDs could use HAMR. If this is the case, then Seagate will have earned its laurels as an early adopter of a successful technique.
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Western Digital’s UltraSMR Strategy
Western Digital was the first firm to reach 20TB, sending out samples of nine platter EAMR drives at the end of 2019 which were made widely available the following year. Fast forward to late 2023, and the firm was shipping samples of its 28TB Ultrastar DC HC680, a 10-disk drive using shingled magnetic recording (SMR).
With regular SMR drives, tracks partially overlap in order to increase storage density. WD has also developed “UltraSMR”, which augments standard SMR with large block encoding and error detection algorithms to prevent noise when tracks are written closer together. With innovations like this, WD insists that it’s “on the road to 50TB by continuing to push boundaries that make leaps in capacity.”
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WD recently announced that it will create a 32TB drive, the Ultrastar DC690. This will augment its 28TB HC680 with UltraSMR to gain an extra capacity boost.
Interestingly Western Digital is pushing their new 32TB drive as one of two new devices which are made with its new AI data cycle framework in mind. In this framework, the cycle begins and ends with data stored in high-cap HDDs. All of the data prep, ingestion, and model training happens in the intermediate stages, for which WD offers its new DC SN 655, a 64TB TLC NAND drive.
As for future plans, CEO David Goeckeler said in an October 2023 earnings call that the company has a “clear roadmap of ePMR and UltraSMR-based innovations into the 40-terabyte range.” While the firm has not provided specific dates, this is consistent with a 2022 roadmap in which WD planned to go all-in on UltraSMR. The same roadmap suggested drives which currently use energy-assisted PMR (ePMR) may instead use HAMR to get past the 2Tb/in^2 range.
Tom Coughlin thinks this shift to HAMR is feasible for WD, and could be accomplished by buying TDK heads and Resonac media. TDK and Resonak already provide these components to WD rival Seagate.
Toshiba’s Transition
The third platter plotter, Toshiba, has a lot on its plate lately. The firm accepted a $15.3 billion offer from Japanese Industrial Partners to take the company private, and was delisted in late 2023. Nonetheless, the firm is pushing to stay competitive in the race for hard drive capacity.
Toshiba’s primary tool for upping capacity has been its MAS-MAMR technology. That’s a variation on microwave assisted magnetic recording (MAMR) which enables a lower current in the write head, allowing for more narrowly focused recording locations.
Last year, Toshiba set 2024 as a date for a 30TB hard drive. They’ve since made good on this, demonstrating a 32TB HAMR drive, though this also made use of SMR. They also showed off a 31TB drive using MAMR. Note, however, that the MAMR drive reached that capacity with the help of an 11th platter.
Toshiba has big plans moving forward. Next year, the firm will begin shipping test samples of 10-platter HAMR drives. Looking further ahead, the firm plans to produce hard drives exceeding 40TB by 2026.
AI Driving Storage Demand
One of the trends driving capacity increases is a pressing need for space to store the data which is the lifeblood of the machine learning craze.
“DRAM, NAND flash, HDD, and even magnetic tape vendors will benefit from this growing demand for storage and memory”, insists Tom Coughlin. He thinks it likely that “emerging non-volatile memories will also benefit, especially for end point AI inference applications.”
Seagate’s chief commercial officer, Ban-Seng Teh, concurs. “Hard drive manufacturers, and the industries they serve, will need to brace themselves for the data explosion and be equipped to deliver on the escalating demands of the booming AI industry.”
Uncertainty and Promise
The data storage industry has seen its share of challenges recently, with geopolitics, supply chain issues, and demand fluctuations driving uncertainty. But with the fortunes of HDD passing a turning point and AI fueling demand for affordable storage at scale, the ending of the hard drive saga has clearly not yet been written.
No wonder, then, that there’s still a great deal of innovation and ambition being brought to bear on spinning media. This is especially true when it comes to the nearline drives used by hyperscalers, as manufacturers ramp up hard drive capacity to ensure HDD stays relevant for years to come.
At Horizon Technology, we know all about data center HDD. For practical support with managing jumps in hard drive capacity now and in the future, get in touch.
