HDD demand to outstrip supply this year says Seagate

Seagate Q2 revenue beats expectations, but exabyte shortage likely for this year

Tags: Seagate Technology
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HDD demand to outstrip supply this year says Seagate Seagate says demand, particularly for volumes of storage, will exceed supply this year.
By  Mark Sutton Published  January 5, 2012

Seagate is warning that hard drive demand will likely outstrip supply during 2012.

In reporting preliminary financial results for the quarter ended 30th December 2011, Seagate said that shortages of raw storage - volume of storage rather than number of drives - would be the worst, while demand for units would also outstrip supply, but not be as pronounced, meaning pricing should remain stable.

Seagate exceeded analyst expectations for fiscal Q2 to end of December, with expected revenue of $3.1 to $3.3bn, against analyst average predictions $2.79bn. Gross margin as a percent of revenue is expected to be at least 30.5%. Seagate's shares rose by up to 7.9% on the news.

Seagate shipped some 47m drives in fiscal Q2, including 700,000 units from Samsung, as part of its acquisition of Samsung Electronics Co hard disk drive business. The deal closed 19th December 2011. Seagate was largely unaffected by flooding in Thailand that hit rival Western Digital.

"The better than expected results for the December quarter are attributed to the company's outstanding operational performance and overall strong execution," said Steve Luczo, Seagate CEO and chairman.

"Due to our best-in-class operations, diversified supply-chain and differentiated manufacturing footprint, we continuously optimized our builds for customers during the quarter. This is best evidenced by our company's ability to increase the average capacity per drive shipped quarter-over-quarter to a record 653 gigabytes, despite the significant supply chain disruption. These results also reflect the hard work and resiliency of the Seagate teams and our strategic suppliers who are working to help the industry recover from the massive disruption caused by the flooding in Thailand," Luczo added.

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