EL SEGUNDO, CA – Worldwide hard disk drive unit shipments grew 18.9% last year, according to iSuppli Corp.
 
Annual HDD shipments crossed the half-billion-unit threshold for the first time, and revenue rose 4.6% year-over-year to $32.8 billion, says the research firm.
 
Beyond strong demand growth from notebook PCs and consumer electronics products, HDD makers benefited from a second-half cease-fire in the price war that had dictated market conditions over the past three years.
 
Although the price war continued to rage in the first half of the year, the second half brought a rebound and an appreciation of the value of HDDs. Pricing was supported by the arrival of high-capacity 1Tbyte HDDs, a key milestone in the face of technology challenges from NAND flash memory, says iSuppli.
 
Seagate Technology maintained its lead in the global HDD market, with its share of shipments rising to 34%, from 33.1% in 2006. The company shipped 175 million HDDs in 2007, up 22% year-over-year.
 
Second-ranked Western Digital shipped 113 million HDDs and increased its share to 22%, from 19.6%. The company benefited from its foray into the enterprise secondary storage market with its premium-priced RAID edition drives, says iSuppli.
 
No. 3 Hitachi Global Storage Technologies increased its share to 17.3%, from 16.1% in the prior year. Hitachi reversed its operating loss of $93 million in the fourth quarter of 2006 to achieve an operating profit of $95 million in the same period of 2007.
 
Despite the competitive threat posed by NAND-type flash memory in products ranging from MP3 players to notebook computers, the industry's strong performance in 2007 indicates HDD isn't ready to quit any time soon.
 
Still, the threat of NAND is going to haunt the industry in the coming years. Only cost reductions and the continued advancement in HDD technology, driven by profit-funded research and development activities, will keep the industry afloat, says the firm.