The storage segment isn’t doing well: Sales of hard drives and SSDs fell sharply in 2022. Big names like Western Digital and Seagate are preparing for tough months.
Western Digital CEO David Goekler said the company would miss its $3.8 billion revenue target, and Seagate lowered its revenue forecast from $2.5 billion to $2.1 billion. Seagate is talking about a “multilateral” correction, which isn’t exactly a sign of optimism in the coming quarters.
Storage giants are talking about an unusual situation in the storage market where the demand for storage devices such as hard disk drives and SSDs is low in both professional and private markets. In August, the store’s newsletter estimated the decline by more than fifteen percent.
“Everyone pressed the pause button”, Tell CEO David Mosley at a conference recently. WD’s rival added that this pause was also being felt for investments in cloud storage.
It is believed that a combination of adverse macroeconomic conditions caused the storage decline. Starting with the corona pandemic. This turned the supply chain for storage manufacturers upside down. This led to higher production costs for devices, which, in turn, moved to product prices.
Going back to the office is also not good for selling hard drives and SSDs. During the pandemic, workers have shown a greater interest in physical devices to keep data safe at home. Now that employees return to the office more often, the need to invest in solutions themselves is diminishing.
The future doesn’t bode well, unfortunately WD and Seagate seem to be in unanimous agreement on that. Investments in cloud storage will likely recover faster than selling physical storage.
If the crisis continues for a long time, manufacturers will have to take drastic measures. For example, under investor pressure, Western Digital will consider limiting the production of hard drives to repel in transverse.
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