Nearline market achieves record unit and capacity shipments, demand remains strong and supply tight
CUPERTINO, Calif., July 29, 2021--(BUSINESS WIRE)--TRENDFOCUS this month released its Preliminary CQ2 2021 HDD Shipment Summary Report, forecasting that the active nearline market will achieve record unit and capacity shipments for the category. At approximately 19 million units and 240 EB, the metrics far exceed previous records of 17.19 million units achieved in CQ1 ’20, with nearly 193 EB shipped in the prior quarter.
The TRENDFOCUS report highlights several factors driving record growth. Hyperscale expansion was well underway at major cloud companies throughout the quarter and OEM demand for traditional IT was trending ahead of earlier forecasts, creating unexpected demand for HDD vendors. Channel demand for high-capacity drives also spiked as predictions surrounding the Chia cryptocurrency launch drove extreme allocation in the nearline market. And HDD pricing rose in the channel while negotiations for CQ3 pricing resulted in increases at OEMs and lower-than-typical declines at hyperscale customers.
Looking downrange, TRENDFOCUS Vice President John Chen noted "OEM demand for nearline HDDs should continue to improve through CQ3 and CQ4 ’21 given a combination of seasonality and demand tailwinds from late-stage COVID economic recoveries in many countries. That said, slowed economic recovery linked to renewed lockdowns in Southeast Asia and emergency orders across other countries may create volatility in the category." Chen also noted that "while the initial storage demand from Chia has cooled due to restrictions on cryptocurrencies, the nature of the crypto market will likely bring additional volatility over coming quarters."
Forecasting near-term demand in the nearline market has always been challenging, but historical cycles have proven to be a reasonable indicator. The TRENDFOCUS report notes that flattening cloud demand with additional digestion before the end of the year, OEM demand possibly hindered by a slowing pace of global economic recovery, and uncertain but expected cryptocurrency market volatility may result in a rebalancing of supply and demand in the future.
TRENDFOCUS analysts are available for interview and commentary on this and other TRENDFOCUS research.
TRENDFOCUS provides the data storage industry’s most trusted market intelligence covering HDDs, NAND/SSDs, and the storage supply chain. Founded in 1993, the TRENDFOCUS method blends "top down/bottom up" and 360° statistical analysis to provide clients with the exacting data sets needed to make complex decisions in today’s environment. Visit TRENDFOCUS at www.trendfocus.com.
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