I predicted a return to growth for the raw storage market back in April. Although very few of the disk drives, flash and memory components are bought by end-users, they are nevertheless essential components of laptops, desktops, smart phones, tablets, storage systems servers and other devices, making this market vitally important to our industry. In the second quarter if the year sales grew a massive 54% to $50 billion in total. Hard Disk Drive (HDD) sales grew 35% to $7.1b, NAND – by 66% to $12.3b – and DRAM, by 56% to $30.6B. In this post I’ll share my capacity and spending forecasts for coming quarters and years. As always, please contact me if you need greater details for your business planning purposes.
My Figure above shows growth in spending by quarter on each devices for the period between 2019 and Q2 2024, with a forecast to the end of 2026. It demonstrates the effect of the disruption caused by the COVID-19 pandemic; shortages in the second half of 2020 led to over-production during the second half of 2021/first half of 2022, causing the dramatic fall in sales from July 2022 til June 2023. In the Spring I predicted that we were experiencing a return to growth, now been confirmed. My forecast is for the trend to continue, with growth rates peaking in 2025 before slowly receding.
On a long-term basis (see my Figure above) 2025 will be the biggest year ever for DRAM sales, while NAND should continue to grow before reachings its peak in 2029; HDD sales revenue will also grow, although it looks highly unlikely that it will ever reach the $60b peak in sales in 2010. I believe the far superior price per GB advantage of disk in comparison with flash and ever increasing maximum capacity per drive will keep HDDs as a vital part of the raw storage market for the foreseeable future.
Turning to look at the shipped capacity of raw storage here are my forecasts for the totals for each of the three raw storage types. My Figure above shows the quarterly totals with a forecast to the end of 2026. I’ve plotted the three on a logarithmic scale due to the wide differences in the totals; or, to put it another way, disk capacity is far cheaper than flash and flash capacity is far cheaper than memory. My forecast is for a return to growth in 2024, 5 and 6. In fact growth will be stronger than the equivalent sales value, due to continuous advances in production techniques and miniaturization.
Looking growth in total shipped capacity on a longer term annual basis (see my Figure above), we can see there have been a couple of disruptive periods, both of which can be related to major world economic downturns; the first (2010-2012) followed the Credit Crunch of 2008 and the second (2021-2023), the COVID-19 pandemic of 2020. It’s likely that major future world events will affect these markets in a similar way.
I show market shares for each of the three types of raw storage and the total in my Figure above.
- The HDD market is ‘owned’ by Western Digital, Seagate and Toshiba, but its diminishing share of the total raw storage spending has reduced these three vendors’ market shares o the overall market.
- The NAND market is dominated by Sansung, who held a 42.9% share in the year to the end of June; Western Digital has been far more successful in moving its emphasis to NAND from HDD than its two rivals.
- The DRAM market has two primary suppliers – SK hynix and Samsung – that together accounted for 55.7%% of the $109b market in the year to the end of the second quarter.
For the foreseeable future I expect the market to continue to belong to these suppliers. The raw storage market is dominated by specialist manufacturers with vital patents and deep pockets to build new, increasingly expensive, production plants, since the barriers to market entry for new players are typically too high.