Thailand’s hard disk drives (HDD) industry will continue to see growth momentum this year as Thai shipments of HDD is forecasted to expand. However, the industry is currently facing challenges as it is being impacted by fast-changing technology and changing user behavior.
Table 1: Key Driver factors for the HDD industry
Thai shipments of HDD continues to grow in 2019
Since 2017, Thailand's HDD exports started expanding from the relocation of some of the world's largest HDD manufacturers from China and Malaysia to Thailand. This is to manage the production cost more efficiently by relying on Thailand’s production base and to mitigate the impacts from the United States and China trade uncertainties as tariffs measures are implemented on both sides. As a result, the growth of Thailand’s computer HDD shipments in 2019 is expected to continue in the medium-term.
Table 2: Do you know? How large is Thailand's share of computer HDD exports?
Another factor is that HDD manufacturers in Thailand are shifting production towards enterprise HDDs to target the corporate market. Corporates highly demand enterprise HDDs to use for their digital transformation investments such as building data centers to store “Big data” and in the Cloud technology, which stores data online. This is important as it contains critical businesses information and their customers’ data.
In addition, personal computer sales will experience short-term boost as some corporates and retail customers are forced to replace their old personal computers and laptops. This is because Microsoft has officially announced the cancellation of Windows 7 operating system that will take effect on January 14, 2020.
Under these conditions, Thailand’s computer HDD and other types of HDD exports will likely continue to grow in 2019. KResearch projects that Thailand will export USD 13 billion worth of HDDs in 2019, which is a 0.9 – 5.0% yoy expansion. Thailand’s HDD exports is expected to peak in 2020 before declining due to future technological changes.
The turning point of data storage technology
Although HDDs have been the main storage device for a long time, its large size and weakness in data processing go against the current consumer demand. Consumers prefer small and light electronic devices such as smartphones and tablets, giving rise to competing technologies like the solid-state drives (SSDs). SSDs are becoming increasingly popular and are quickly gaining market share in the storage devices market. KResearch estimates the Computer SSD share in the global computer storage device market to leapfrog from 31% in 2017 to 43% in 2019.
Table 3: HDD vs SSD
Although the enterprise HDD market continues to grow, it is growing at a slower pace as SSDs are increasingly used for data storage in organizations, especially in areas that require regular access to data and does not require large storage capacity.
The future of the HDD industry and Thai export opportunities
Thailand’s HDD industry will continue to expand over a period of time thanks to the global megatrend towards digital transformation. Meanwhile, some customer segments, especially large corporates, still prefer to use HDDs due to its large storage capacity that can be acquired at affordable prices. HDDs are still being improved and developed continuously. HDD manufacturers are developing enterprise HDD products with larger data capacity and lower cost per storage unit, declining by more than 18 percent per year. In summary, continued advancements in enterprise HDDs for corporates allows it to remain and grow in the data storage market.