An Analysis of the Influence of the Japan Earthquake on the Hard Disk Industry

An Analysis of the Influence of the Japan Earthquake on the Hard Disk Industry The impact of the earthquake and tsunami in Japan is all-sided, and the hard disk industry is no exception. Under the multiple challenges of SSDs, cloud computing, and vertical read/write limitations, an earthquake has added to the hard disk industry. Many hard disk discs and substrate manufacturers' factories have been damaged in varying degrees, and there have been some casualties. , had to temporarily suspend production.

After Hitachi Global Storage (HGST) was acquired by Western Digital, there were only four major families in the hard drive market: Western Digital, Seagate, Toshiba, and Samsung Electronics. The first two hard drives are self-produced. The latter two are partly dependent on outsourcing. However, all hard disk components of all manufacturers are dependent on the upstream suppliers to a certain extent. Any changes in the front end of the supply chain will affect all of them. .

For hard disk discs, Showa Denko has a global market share of about 25%, with a monthly output of about 22 million. The factories in Chiba and Yamagata, Japan, have all stopped production. However, the company also has factories in Taiwan and Singapore. Especially since the latter began to increase production at the end of last year, it can make up for the lack of production capacity. On the other hand, Showa Denko's customer Western Digital and Seagate have all achieved partial self-supply of hard disk discs (the total share has reached 52%), so the impact on the hard disk disc market is not significant.

Substrates for hard disks are mainly made of aluminum and glass. The former is widely used in PCs due to its low cost, especially for desktop computers. Kobe Steel and Furukawa Denko are the major suppliers of most aluminum substrates, with market share of 60% and 40% respectively. Unfortunately, both factories are concentrated in the disaster area, so if it continues to close, aluminum substrates will inevitably face a shortage.

As much as 63% of the glass substrates favored by notebooks for their excellent anti-vibration performance come from Hoya in Japan, but it has no factory in the disaster area.

The suppliers of read/write heads also come from Japan, including TDK, Showa Denko, and Fuji Electric, among which TDK occupies about 30%, but the factories are far away from the disaster area and have not been affected, but both Showa Denko's factories in the disaster area have been closed. Fortunately, the company’s share is very small. In addition, Western Digital and Seagate are also producing their own read/write heads to a large extent. The total share is 54% (excluding Hitachi), so overall, the read/write head market has basically no interference.

The electric motor market is monopolized by Nihon Densan with a 76% share, but the industry in the disaster-stricken area does not have his factory.

In 2010, total shipments of the global hard drive market were approximately 650 million, of which Western Digital was the top spot with 31.3%, followed by Seagate with 30.3%, Hitachi with 17.2%, and Toshiba and Samsung with 10.9% and 10.3% respectively. After Western Digital acquired Hitachi, market share will jump to 48.5%, becoming a true elder brother.