HDD Capacity Continues to Expand

Implications: * Seagate announced their Barracuda 1.5 TB disk drive, the first announced disk drive with more than 1TB capacity  * Seagate also announced their first 500 GB 2.5-inch drive products with 5200 and 7200 RPM  * The 3.5-inch 1.5 TB product will begin shipping in August 2008 while the 2.5-inch 500 GB products will ship in Q4 2008  * Separately Hitachi said that 5 TB HDDs will be possible by 2010

Analysis: HDD storage capacities continue to expand.  Last year saw the introduction of 1 TB 3.5-inch drives by Hitachi, followed by all the other 3.5-inch disk drive manufacturers.  This year Seagate has announced 1.5 TB capacities in this form factor.  The Seagate Barracuda drive supplies 1.5 TB on 4 disks (375 GB per 3.5-inch disk).  This is the highest capacity ever announced in a hard disk drive.  The 1.5 TB Barracuda runs at 7200 RPM. 

1.5 TB storage capacity supplies a lot of storage for computer, consumer and enterprise applications.  I expect to see additional offerings of 1.5 T and maybe even up to 2 TB storage capacity in the next few months.  A recent article also says that Hitachi Global Storage Technology expects 5 TB disk drives by 2010.  To put 1.5 TB in perspective, this is enough storage capacity for 319 DVD quality movies and about 60 Blu-ray (at 25 GB each) movies. 

Unlike in the past when HDD areal densities grew at greater than 100% annually, the more moderate growth of 40-50% on average per year is lower than the growth in storage demand.  As a consequence I don’t believe that there will be any significant negative impact on disk drive demand or component count (heads and disks).  Instead I see continual growth in both shipping storage capacity and hard disk drive storage capacity—especially with advances in media and head technology foreseen over the next 5 years.

Higher HDD areal density drives enable new applications and provide a significant economic advantage in $/GB compared to other storage technology, such as flash memory.  Most hard disk drives are used for mass storage applications and over the last 5 years the demand for digital storage has increased as the price of storage has declined. 

I have come up with a couple of metrics to represent this growth in demand over this period.  These are:  1) storage capacity shipped increased by 2.1 Exabytes per every percent drop in the $/GB  of drives and 2) HDD units shipped increased by 3.2 million units for every percent drop in the $/GB of drives.

Storage demand, and hence disk drive demand is very elastic.  As the price of storage capacity declines it enables increasing numbers of applications using ever higher amounts of storage capacity.  I estimate that by 2012 annual shipments of hard disk drives could exceed 1 billion units per year (up from just over 500 million units in 2007). 

Not only are applications directly using hard disk drives benefited by their growing capacity but so are many other applications using other types of digital storage.  For instance flash memory is used for many mobile playout devices as well as content capture consumer devices such as still and video cameras.  In all these cases the flash memory is temporary storage with long term storage on hard disk drives. 

As larger hard disk drives become available the support for these other devices increases and demand for both the hard disk drives and the flash memory in these consumer products increases.  Furthermore as all this content increases so does the value of backing up content, again on hard disk drives.  Large hard disk drives are good for storage growth, all sorts of storage growth.