Western Digital and Seagate revealed hard disk (hard disk) and SSD (SSD) sales have declined throughout 2022 and are “getting worse”.
Western Digital CEO David Gockler commented (opens in new tab) At a recent Goldman Sachs technology conference, he added that he has no confidence in the company’s sales revenue forecast of about $360-3.8 billion in the final quarter of the year.
For its part, Seagate also revised its revenue forecast for the most recent quarter to $2.1 billion from $2.5 billion. CEO Dave Moseley, when he himself attended the meeting (opens in new tab)said, “everyone is just taking a little pause in investing in storage of any kind,” calling the trend a “multi-quarter correction.”
Storage Industry Dilemma
Goeckeler points out that even investing in Enterprise cloud storage Sales from reputable vendors are down, so the current slump in brick-and-mortar sales can’t be entirely attributed to the post-pandemic trend of businesses investing in cloud storage to facilitate work-from-home perks.
Instead, Mosley claimed the decline in sales was due to a lack of interest and support from businesses and consumers, which he said was unusual for this time of year. Goeckeler was generally more optimistic about WD’s total consumer revenue, calling its SanDisk brand a “jewel of the consumer business.”
Goeckeler also claimed that the specter of COVID-19 has kept costs high across the board, reducing WD’s gross margin.
“And then hopefully, at some point, we’re going to get out of COVID. I mean, COVID is kind of like all the extra costs we have, whether it’s logistics or keeping our employees safe, or all the other types of things we’ve got COVID-related Stuff, these are basically going to subside and we’ll be able to get back to the profit of the business that we expect. And because of that, we’re in a trough right now.”
Between the resurgence of the virus and the companies’ declining demand in China, it’s no surprise that the storage media industry is struggling.
The industry-wide “correction” is still in its early stages, but going forward, cloud storage does have clear inherent advantages over physical products in terms of cost and convenience.
As such, we can only speculate whether physical media will continue to be so accessible and cost-effective for the foreseeable future, as businesses and consumers become less interested in keeping data closed.
