Western Digital and Seagate revealed this hard disk (hard disk) and solid state drive (SSD) sales have declined throughout 2022 and that “the situation is getting worse”.
David Goeckeler, CEO of Western Digital made the comments (opens in new tab) at Goldman Sachs’ recent technology conference, adding that he has little confidence in the company meeting its revenue guidance of around $3.6 billion to $3.8 billion in the final quarter of the year.
For its part, Seagate also revised its revenue guidance for the most recent quarter, cutting it to $2.1 billion from $2.5 billion. CEO Dave Moseley, in his own appearance at the conference (opens in new tab)said “everyone is just taking a little break” from investing in storage of any kind, and labeled the trend a “multiple-quarter correction.”
problems in the storage industry
Goeckeler found that even investing in Enterprise cloud storage from reputable vendors are down, so the current decline in physical sales isn’t entirely due to the post-pandemic trend of companies investing in cloud storage to ease work-from-home allowances.
Mosley instead claims that the drop in sales was due to a lack of interest and support at both the corporate and consumer levels, which he says is unusual for this time of year. Goeckeler was more positive overall about WD’s gross revenues, claiming that its SanDisk brands are a “gem of consumer business.”
Goeckeler also claimed that the specter of COVID-19 kept costs high across the board and squeezed WD’s gross margins.
“And then hopefully we’ll be out of COVID at some point. I mean COVID pretty much just has all the extra costs that we have, whether it’s logistics or the safety of our employees or all the other things that we have with COVID, those are basically going to go down and we’re going to be able coming back to that, the margins we expect from the deal. Because of that, we are at a low point right now.”
With the recovery from the pandemic and both companies suffering from lower demand in Chinese markets, it’s no wonder the storage media industry is struggling across the board.
The industry-wide “correction” is still in its infancy, but looking ahead, cloud storage has clear, built-in advantages over physical offerings in terms of cost and convenience.
As a result, we can only speculate whether physical media will continue to be as readily available and inexpensive for the foreseeable future as businesses and consumers become less interested in keeping their data close.
https://www.techradar.com/news/seagate-and-western-digital-predict-a-grim-future-for-storage-media-sales Seagate and Western Digital predict a grim future for storage media sales