Hard disk market returns to revenue growth in '03

The hard disk drive industry is returning to revenue growth in 2003. Chip designers Meditek and Marvell are among the few rising stars taking a bigger bite out of the slow-growing overall storage market, according to a new report from iSuppli Corp.
The market watcher expects hard disk and optical drive markets will only grow about 3.5 percent each on a compound basis through 2007. While unit growth is strong in both sectors, iSuppli expects continued price declines based on growing consumer sales of hard drives and increasing competition from Taiwan and China OEMs in optical drives.

Hard disk makers saw sales fall 18 and 9 percent and average selling prices drop 15 and 18 percent in 2000 and 2001, respectively. Hard drive ASPs will dip a more modest 3.9 percent this year, iSuppli predicts.

New technologies like the serial ATA interface are taking off slowly, according to the market watcher. The report said even though mainstream chipsets support SATA, only 10 percent of all drives shipped in 2003 will use the new interface. That's because PC makers don't see significant performance benefits for SATA and are still equipping systems with the cheaper drives using the parallel ATA interface. SATA will replace the majority of parallel ATA drives by 2005, the report said.

With revenues of $546 million, Taiwan's Mediatek Corp. surpassed Texas Instruments in 2002 to become the second largest storage chip vendor, next to STMicroelectronics, the report said. The trio dominate the storage chip sector with a 46 percent share of the sector's $6.9 billion in chip sales.

Mediatek's broad portfolio of optical-drive chips and close links to growing Taiwan and China OEMs accounted for its 57 percent revenue growth last year, according to iSuppli. Marvell Technology Group's storage chip sales shot up 116 percent in 2002 to $210 million, leaping from number 14 to 5 on the iSuppli list.

Vitesse Semiconductor and Taiwan's Acer Labs were the next fastest growing vendors at 52 and 86 percent, respectively. Agilent was the loser, with sales dropping 43 percent to $66 million.