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  • Disk Drive Market Stabilizes, Recovery Seen
  • August 5, 1998 (SINGAPORE) -- After almost a year of sluggishness, the world's disk drive market is starting to stabilize and growth is forecast on the horizon, said Dennis Waid, president of U.S.-based Peripheral Research Corp.
    In a major disk drive seminar in Singapore last week, Waid said. "(global) demand is starting to stabilize, and we expect to see rising demand in the second half" after a contraction in the first half. Manufacturers in Singapore supply up to half the global supply of rigid disk drives.

    Issues like slow the ramp up for enterprise systems, sluggish demand in personal computer markets, problems associated with yields in drives with magneto-resistance technology and the Asian economic crisis have crippled the market in the past year.

    But "recovery is beginning to take place in the third quarter," Waid said.

    According to new forecasts from the company, the overall rigid disk drive market is forecast to grow 12.5 percent in volume to 144.9 million drives in 1998 and a further 16 percent to 68.3 million units next year. Forecasts earlier this year had indicated growth rates of about 17-18 percent in 1998 and up to 20 percent next year.

    Waid showed that the 3.5-in. drive business, which comprises the biggest chunk in volume terms of the hard disk drive market, is forecast to grow 11 percent to 121.1 million in 1998 and a further 18 percent to 143.3 million units in 1999.

    The 2.5-in. market is expected to grow 22 percent to 16.9 million drives this year and another 7.6 percent to 18.2 million drives next year. As far as components, magnetic head production is forecast to grow 10 percent to 990 million units, while disc media output will grow 7.3 percent to 485 million units this year, according to forecasts by the company.

    Waid said that one of the key factors that will create overall strong storage demand in 1998 will be the resurgence of removable hard disk drive products. Future interaction of DVD, DVD-RW and DVD-RAM drives with other storage products will also create new demand, apart from increasing portability of new low-cost drives, he said.

    The return of demand for drives to merchant makers and the shift in market share toward Asian suppliers have been two of the most visible trends in the market recently, said Waid. "IBM Corp. and Fujitsu Ltd. have made major inroads into merchant markets in both drives and components," said Waid.

    IBM, which has a major manufacturing plant in Singapore, and Fujitsu used to make drives mainly for the internal needs of the their systems divisions.

    Market share has also been increasingly shifting towards Asian suppliers like Fujitsu, Samsung Electronics Co., Hyundai Ltd., Hitachi Ltd. and TDK Corp. at the expense of companies like Seagate Technology Inc. and Western Digital Corp.

    Looking ahead on a 18-24 month horizon, Waid said the typical 3.5-in. drive will have a storage capacity of 7.0GB-8.0GB per platter, and the standard capacity per drive with five disks can average about 36GB-40GB.

    Drives should also feature rotational speeds of 14,400rpm and access times of less than 6ms.

    In a separate presentation, analyst Toren Ajk, also of Peripheral Research, said the market for tape drives will contract 7.2 percent to 4.81 million units in 1998 and a further 6.6 percent to 4.49 million units next year. In volume terms, the biggest contraction will be seen in the quarter-inch CD market, Ajk said.

    He also said CD-Read/Write drives are rapidly replacing CD-R optical drives as the choice of rewriteable disk technology. The low-cost of media is becoming a major factor in its ability to compete, he said.

    (Joseph Rajendran, Asia BizTech Correspondent)

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    Updated: Tue Aug 4 17:23:47 1998