TRENDFOCUS: Combined SSD, HDD Storage Shipped Jumps 21% to 912 Exabytes in 2018

Revenue down slightly to $46.2 billion, with supply-demand imbalances
continuing in 2019

CUPERTINO, Calif.–(BUSINESS WIRE)–lt;a href=”” target=”_blank”gt;#enterpriselt;/agt;–With the continued expansion of major hyperscale data centers and a
stabilization in PC sales, demand for key storage devices – both HDDs
and SSDs – drove a new record for capacity shipped in 2018. The number
of exabytes sold increased 21.4% from the prior year to 912 exabytes.
Combined revenue eased to $46.18 billion due primarily to a rapid
contraction in SSD prices.

“Despite late-year fluctuations in both enterprise SSD and high-capacity
HDD markets, the data storage industry grew solidly in 2018,” stated
Mark Geenen, President of TRENDFOCUS, a market analysis firm
specializing in data storage. “Revenue was a different story. While HDD
price declines remained rational across nearly all applications, SSD
prices went from record highs early in the year to a state of collapse
by year-end due to an oversupply of NAND. And, unfortunately, we do not
see a significant change in the pricing and demand dynamics until
sometime in the 2nd half of 2019,” added Geenen.

The evolution of the HDD industry continued in 2018, with gains seen in
cloud and data center applications, as well as in video surveillance.
HDD capacity shipped topped 800 exabytes, fueled by stunning growth in
capacity enterprise (also known as nearline) HDDs bound for cloud and
data center applications. Revenue grew less than 1% as industry unit
shipments to PCs continued to decline.

In 2019, client HDD demand will remain under pressure with accelerating
SSD attach rates from falling NAND pricing cutting PC demand for the
legacy storage technology. On the other hand, the current weakness in
capacity-intensive cloud requirements for HDDs should begin to recover
by mid-year, with the qualification and ramp of 14 TB HDDs driving the
next wave of hyperscale growth.

SSD exabytes sold skyrocketed over 45% in 2018, as sales to both client
PCs and enterprise/cloud segments enjoyed healthy growth. But SSD
revenue declined marginally as the supply sufficiency metric flipped
from undersupply to oversupply in a matter of months. “NAND oversupply
in the later parts 2018 resulted in dramatic price reductions in all SSD
market segments,” stated Don Jeanette, Vice President and lead analyst
for TRENDFOCUS SSD research. “That wiped out all revenue growth
experienced by the SSD market from mid-2017 through the summer of 2018.”

Demand for NAND flash continues to grow, and the falling prices will
drive elasticity of demand in 2019, especially in client markets. Steps
taken by NAND suppliers to control wafer starts this year to realign
supply growth with current market demand dynamics may drive
re-stabilization later in the year, especially if the expected
resumption of cloud growth for capacity HDD demand also coincides with
an upward inflection of higher capacity of SSD storage.

Full details of TRENDFOCUS’s analysis can be found at,
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John Chen
(408) 996-9903

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