It’s About Time the Hard Disk Drive Companies Defended their Turf

Implications: * Yoichiro Tanaka, senior manager of Toshiba’s Storage Device Division gave a talk at an IDEMA Japan event  * He disagreed with three analysts that spoke before him that HDDs were threatened by flash memory  * While Tanaka-san recognized the important role that flash memory provided for mobile devices for playing content he pointed out the result of these flash based players was a net increase in the amount of information that is distributed and stored  * He stated that HDDs will contain 80% of the world’s information * The prediction is based upon increasing adoption of 1.8-inch hard disk drives in camcorders, notebook PCs and external HDDs—he stated that in 2008 more than 40% of all camcorders will have embedded HDDs.

Analysis:  For the last couple of years there has been a pretty steady barrage of comments and analysis suggested that HDDs are soon to be replaced by flash memory in all sorts of consumer as well as computer applications.  The argument is that flash memory is increasing in storage capacity and decreasing in price, making it affordable for many applications.  In this view of the world hard disk drives will be gradually displaced by solid state memory in application after application.  

In actual fact HDDs have been exhibiting steady unit growth and also growth in storage capacity.  In 2007 I estimate that there were about 508 million drives produced.  This is 16% more disk drives than were shipped in 2006.  At the same time by the end of 2007 hard disk drives with different form factors offered 1 TB (3.5-inch), 500 GB (2.5-inch), 160 Gb (1.8-inch) and 40 GB (1.3-inch). 

I project that with rising demand for hard disk drives to hold the world’s mass storage and to support applications using flash memory such as music and video players as well as digital still camera there will be over 1 billion drives shipped annually by 2012.  By then there will be several TB capacity 3.5-inch drives, more than 1 TB in a 2.5-inch drive.  1.8-inch drives will offer hundreds of GB and there could be more than 100 GB on a 1.3-inch drive.  

In my view and it appears to be shared by Tanaka-san there is much more synergy in the market between flash and hard disk drives.  The growth of either makes the other more valuable and helps drive demand for it as well. Both hard disk drives and flash memory offer increasingly more cost effective storage media that will find more and more applications.  However most flash applications will require the mass storage capability of a hard disk drive to provide content or to save recorded content captured on flash.  Likewise inexpensive hard disk drives enable consumers and companies to provide high resolution content that can be stored for playback on mobile devices using flash memory.   

Furthermore, as is the case for Turbo memory, Hybrid Hard Drives, SanDisk’s Vaulter and other products there may be overall system advantages to combine both types of storage together to provide a higher performance and higher capacity total product solution.  The market for digital storage is not so simple as “winner takes all”.  Flash and hard disk drives are increasing in storage capacity at about the same rate so they may never reach parity. 

At the same time increasingly less expensive storage encourages product designers as well as content creators to provide ever richer and higher resolution experiences.  I see no end to this innovation anytime soon and inexpensive storage is one of the key enablers.   Thus I applaud Tanaka-san and Toshiba for defending the valuable role of HDDs and particularly defending small form factor hard disk drives. 

It is important that hard disk drive companies not let the 1.8-inch form factor be taken over by other memory applications for as history has shown smaller form factor hard disk drives are the future of this storage technology due to the physics of disk drive design and scaling.