HITS

Big data and fast data in the cloud, as well as mobile and Internet of Things (IoT) growth, are among the largest demand drivers for Western Digital (WD), according to Western Digital (WD) CFO Mark Long.

This is a data-driven economy today in which data functions as currency and “pure value,” he said June 6 at the Bank of America Merrill Lynch Global Technology Conference in San Francisco. Citing a recent Accenture study, he predicted that, by 2030, “we’re going to see trillions of dollars… of actual value that will be exchanged through data.”

WD is seeing accelerating storage demand, he noted. If one is conservative and just scales with data growth and data that’s being created, it’s expected that we’ll see annual industry bit shipment growth of 35-40% in flash storage, he projected.

At the same time, annual capacity enterprise bit shipment growth of about 40% is expected, he said, adding: “We are experiencing significantly higher growth this year in that category and we feel really good about the long-term prospects.”

Artificial intelligence (AI) and machine learning are playing significant roles in the evolving data types within the industry, he also noted.

WD sees a $105 billion combined market opportunity for flash and hard disk drive (HDD) storage by 2021, he projected, citing recent Gartner and IDC forecasts. That includes $81 billion in flash storage (up from $54 billion in 2017) and $24 billion in HDD storage (the same as 2017).

The “key trends” driving broad-based flash growth are in the “three pillars” of WD’s flash business: client, mobile embedded and enterprise, he said. Meanwhile, although WD is seeing significant growth in capacity enterprise, that’s being “offset” by a decline in client, he said.

“In order to be a leader in this industry, you really need to be able to do three things [to] be able to generate compelling financial performance” today: have technology leadership, offer a broad product portfolio and have operational excellence, he went on to say. “Western Digital has all three of these,” and is demonstrating strong financial performance, he said.

As an example of WD’s technology leadership, he noted that the company has leadership in 3D flash.

The company, meanwhile, plans to start sampling microwave-assisted magnetic recording (MAMR) next-generation HDDs in late 2018 and “commercialize” them starting next year, he told the conference.

Continued growth in cloud computing and mobility, combined with “continued strong demand” for Western Digital (WD) NAND flash memory, helped give WD a lift in its third quarter (ended March 3), WD CEO Steve Milligan recently said on an earnings call. WD’s Q3 revenue grew to $5 billion from $4.6 billion a year ago, while operating income increased to $914 million from $525 million.

WD is “anticipating that the NAND market remains normalizing and that it’s constructive and we can continue to operate as we have been,” Long said during a Q&A at the conference June 6. “We could see some tightening [of supplies] in the back half” of this year, “based on some of the things we were hearing about: potential demand from mobile handsets and just the fact that the back half is seasonally stronger,” he said, adding: “So, if we do see upside in any of these areas, it will have a very positive effect.” Over the next few months, we’ll start to know if there are any “indicators of that tightness,” he said.