Yesterday I was reading a blog from the VDC Embedded Hardware group and I began to think about the long term impact of the recent Thailand floods on the hard disk drive market. My thinking is based around the following premise. Could this be the disruption that causes industrial and personal computer manufacturers to switch to solid state units?
With my curiosity raised, I looked into it further and found that Seagate fared much better than its two main competitors Western Digital and Toshiba. I'm not sure whether there was some serendipity involved in that Seagate's factory avoided the issue or whether in might have been a Forrest Gump situation where they were very lucky and their "boat" survived while most of the competitors were wrecked. Seagate now has the luxury of raising their prices and locking in customers for long term contracts.
A disk drive is a combination of very high speed chips and a precise electro mechanical assembly of rotating disks that have to be assembled in very clean facilities. One spec of dust and the unit being manufactured is defective. The semiconductors can be made in a fab located anywhere but a disk drive facility is highly specialized. So, a quick takeaway is that hard disk drives will likely be in shorter supply and therefore more expensive.
A few years ago I was a support manager for a semiconductor test platform that used a shoebox sized industrial computer. Because of the unit's small size it used a laptop type disk drive. To make a long story short, the operating environment and stresses from being embedded inside the tester caused these laptop drives to be unreliable. I began to look at solid state disk drive technology but the first units I saw were Mil/Aero. types and way too expensive. Prices began to come down but the storage capacity was not where they needed to be. In 2009, hard drives still had the edge over solid state but now, in 2011, given the recent events and increase in traditional hard drive pricing my bet is that the tipping point has been reached. Will computer suppliers such as Dell and HP react well to Seagate holding them up at virtual gunpoint or will they look at alternatives? Time will tell.
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