The disk drive business was thought to be in a steady state a year or so ago. The number of vendors had fallen as the industry consolidated. Seagate led with Western Digital and Maxtor following and then HGST, Fujitsu and Toshiba. Now HGST has become the industry’s number two. Western Digital is suffering layoffs and Seagate has recently stumbled. The per-unit price and production volumes have not been as stable as suppliers have hoped.

Hitachi GST is now the world’s second largest hard disk drive manufacturer and is expanding its product range and manufacturing facilities.

It announced a 4GB micro-drive in 2003 and a 400GB SATA drive earlier this year. The company has an 80GB notebook drive and started shipping 1.8 inch drives last year. It has recently announced a half billion dollar ‘mega manufacturing centre’ to be built in Shenzhen, China.

We have also covered various HGST disk drive advances, here for example. The company formed its present state when it took over IBM drive manufacturing last year. Two main outlets for its drives are IBM and Hitachi Data Systems, also part of the Hitachi group. Techworld talked to Steve Pereira, managing director of Hitachi GST, to get his views on the results of the IBM - Hitachi GST merger and on small form factor drives.

Steve Pereira was with IBM originally and said, "Most mergers fail. We put in place a partnering system. The idea was to create a dialogue between ex-Hitachi and ex-IBM. We had a very fast integration in Europe. We worked very hard on it."

“This is a very fast, transient business, and we need to stay on top. We were profitable since September last year and we jumped straight into second place on full year revenue.”

Overall drive production by HGST is ramping up. Pereira said, “We took our production up last year and we’re going to continue that this year. Expect revenue to grow from 22 billion dollars in 2003 to more than $26 billion in 2006.”

The result of the merger is a much stronger HGST. Pereira thinks, “The deep R&D strength is probably the key one for the long term. It’s the ability to produce higher areal densities, wider product portfolios find new applications, that’s going to make the difference for Hitachi GST.”

“We certainly have the broadest product portfolio at the moment. We have everything from the 1 inch micro-drive to 15,000 rpm SCSI and Fibre Channel and we’ve got 400GB 3.5 inch serial ATA. There’s real momentum. We’re very much focussed on getting new solutions to customers quickly.”

Becoming smaller
The action is with small form factor drives. The market’s growth rates increase strongly as the form factor shrinks. Pereira said. “The femto slider was really important to us. (A light weight and smaller part of the head:disk assembly.) It allowed us to move to 7200rpm in a 2.5 inch drive with equivalent power usage to a 5400. It gave us a boost in performance and allowed us to get very high performance drives out into notebooks. We’ve had explosive growth in notebook hard drives last year.”

HGST supplies notebook drives for Hitachi notebooks and also to other notebook vendors.

The traditional drive market is IT, in desktops, notebook and server. However, in the future a large chunk of the storage market is going to be in non-traditional areas. The automotive industry for example. Notebooks and desktops are still growing.

The key market is consumer electronics. MP3 players and PDAs are both getting disk drives, particularly following on from the success of Apple’s iPod. HGST supplies drives for Dell’s MP3 player and this business is expected to grow, with personal video recorders being another product segment.

Pereira said, “It’s not emerging anymore. It’s here. There’s margin for our customer base here and there’s opportunity for us with MP3 players costing £300.”

The growth rates in drive shipments are spectacular. Pereira revealed that, “We’ve got 80 percent on 1 inch drives, 70 percent on 1.8 inch – non-IT; the high-growth is all non-traditional IT. 2.5 inch has 34.5 percent growth. The high growth is all outside IT.”

Consumer tail wagging IT dog
What’s happened is that drives have got smaller in physical size. This has led to PDAs having small hard drives in them. Then games consoles got drives and the personal video recorder came along. Suddenly it seemed that disk drives could be used in consumer electronic items. The current holy grail is probably the mobile phone because it is ubiquitous and clever phones with MP3, digital camera and PDA functions will have an awful lot of data to store. It’s possible that the consumer market could overtake the traditional computer market and then product innovation may be more driven by consumer devices than traditional computing needs.

Pereira reckons that, “In 2007 – non-IT demand near matches IT in demand. Twenty percent of the 2.5 inch drives I ship today goes into non-IT today.” From then on it’s likely that consumer demand in units will exceed traditional IT demand.

There is a need to increase the number of I/Os from a unit of rack drive space. The way to do that is to use smaller drives and pack more of them into the same space previously occupied by larger drives. We will see 2.5 inch drives used instead of 3.5 inch. This view parallels that of Seagate.

Pereira thinks the transition will be fairly fast; “We’re still about a year and a half away from 2.5 inch form factor in high-end server. Yes, I think it will come.”

HGST is pushing ahead. There is lots of growth ahead in the drive business and companies such as Cornice show that the traditional drive design is not necessarily fixed in stone. We may well find that drive advances pioneered to suit consumer electronic needs feed back into the IT world to produce different and better spinning disk storage.