Just a Memo

I guess that the hard disk drive (HDD) market is not familiar to many people. The bottom of the figure shows us an example of the Kryder's law, which is one of similar laws of Moore's law -- a long-term trend in the history of computing hardware. Anyway, I'd like to think about the HDD industry through a current issue.

Figure: Hard Drive Capacity Over Time by the Wikipedia

Western Digital (WD) and Hitachi announced on March 7, 2011 that WD will acquire Hitachi Global Storage Technologies (Hitachi GST) for approximately $4.3 billion, according to an article by Venture Beat and a press release by WD.

This news gives a significant impact on the HDD industry. To begin with, the leader of the industry is Seagate, which has occupied about 41% of the market share, according to Smart HDD. And, WD is the second at approximately 23%, and the third is Samsung at approximately 16%. Hitachi GST has held about 8% of the market share. As a result of the acquisition by WD, WD will be closer Seagate's market share (simply, market share of WD and Hitachi GST totals about 31%.). Additionally, as an interesting thing, Seagate is favoring heat assisted magnetic recording (HAMR), while Hitachi GST favors patterned media (DTR or PBM) -- both have been known as a new technology. As long as I read a report of the HDD industry by Tom Coughlin and Ed Grochowski, it would be happened a format war between HAMR and DTR/PBM, such as the format war between Blu-ray Disc and HD DVD, and so on -- aka, a de facto standard. Therefore, competition between WD and Seagate will be harder, instead of the previous competition among to five companies; Seagate, WD, Samsung, Hitachi GST, and Toshiba.

It also implies another thing, which Samsung would take action like acquiring a HDD company or constructing a new factory to enhance their capacity of producing. It is because Samsung will keep away from the top two companies; Seagate and WD.

Thus, what WD is going to buy Hitachi GST is a big deal for the HDD market. How the market will be changed is interesting for me as a consequence of the acquisition.