Hard disk drives (HDDs) have been around since the 1950s and are still widely used today as a reliable and cost-effective data storage technology. The hard drive industry has gone through major changes over the decades, with acquisitions and consolidations leading to fewer active manufacturers today than in previous decades.
How Many Hard Drive Manufacturers Are There Today?
There are currently only 3 major hard drive manufacturers left in business: Seagate, Western Digital, and Toshiba. Together, these 3 companies account for virtually 100% of the worldwide HDD production. Numerous other HDD makers have exited the market, been acquired, or gone bankrupt over the years.
Major Hard Drive Manufacturers
| Company | Headquarters | Market Share (2020) |
|---|---|---|
| Seagate | Ireland | 35% |
| Western Digital | USA | 29% |
| Toshiba | Japan | 36% |
Seagate is currently the largest producer of HDDs, with a market share of around 35% in 2020. Seagate is headquartered in Ireland and has been manufacturing drives since 1979.
Western Digital, headquartered in California, has a market share of around 29% and has been in business since 1970.
Toshiba, the only remaining major Japan-based hard drive maker, accounts for approximately 36% market share in 2020. Toshiba entered the HDD market in 1939.
So in summary, while there were dozens of HDD makers worldwide several decades ago, consolidation of the industry means only these 3 major players remain today.
History of the Hard Drive Industry
To understand how we went from dozens of HDD makers to only 3 today, we need to look at the history of acquisitions and business shifts:
1950s – Birth of the HDD Industry
Commercial hard drives emerged in the 1950s, first from IBM and soon followed by other companies getting into the new data storage technology. During this pioneering decade, new hard drive manufacturers included:
- IBM
- Memorex
- Control Data Corporation (CDC)
- Burroughs Corporation
- General Electric
- Univac
1960s – Continued Growth
The 1960s saw continued growth in the nascent HDD industry. Notable new manufacturers during this decade included:
- Hewlett-Packard (HP)
- Honeywell
- Priam Corporation
- CalComp
- Microdata
- Fujitsu
- Hitachi
1970s – Beginning of Industry Consolidation
Many of the HDD pioneers from previous decades either left the industry or were acquired in the 1970s:
- Memorex exits HDD industry in 1972
- Honeywell’s HDD division bought by Key Tronic in 1974
- GE sells HDD division to Honeywell in 1970
- CDC sells HDD division Control Data in 1988
Major new HDD companies formed in the 1970s included:
- Seagate in 1979
- Quantum in 1980
- Conner Peripherals in 1983
So while new players kept entering, acquisitions and closures marked the start of industry consolidation.
1980s – Rapid Technology Growth
The 1980s brought rapid growth in HDD technology and storage capacity, prompting more companies to enter the lucrative industry:
- Western Digital in 1988
- Maxtor in 1982
- Miniscribe in 1983
- Micropolis in 1985
- Tandon in 1981
However, several major acquisitions also occurred:
- Univac HDD division bought by Memorex in 1988
- Kalok bought by Corrupter Peripherals in 1989
- Rodime bought by Micropolis in 1989
1990s – Accelerated Acquisitions & Failures
The 1990s saw an accelerated pace of acquisitions and business failures among HDD companies:
- Conner Peripherals buys MiniScribe in 1990
- Seagate buys Conner Peripherals in 1996
- Western Digital buys Tandon in 1991
- Quantum buys DEC’s HDD business in 1994
- IBM sells HDD division to Hitachi in 2002
- Maxtor buys Quantum’s HDD business in 2000
Major companies that went out of business:
- Micropolis in 1998
- Syquest in 1998
- JTS in 1999
This marked the beginning of the end for most HDD makers besides the emerging giants Seagate, Western Digital, Quantum, and Maxtor.
2000s – Only Major Players Remain
The 2000s saw the last remaining shifts among major hard drive manufacturers:
- Seagate buys Maxtor in 2006
- Western Digital buys Komag in 2007
- Toshiba buys Fujitsu’s HDD division in 2009
- Western Digital buys Hitachi HDD division in 2012
And final major business failures:
- Quantum sells HDD business to Samsung in 2005
- Samsung exits HDD business in 2014
This leaves Seagate, Western Digital, and Toshiba as the last companies standing. Nearly all other HDD makers have either been acquired, sold to new owners, or gone out of business completely.
2010s to Today – Status Quo
From 2010 to today, no major changes have occurred among the remaining big three hard drive manufacturers – Seagate, Western Digital, and Toshiba continue to dominate the HDD industry.
As solid state drives (SSDs) grow increasingly popular, HDD demand has leveled off, making it unlikely any new major HDD manufacturers will enter a mature, declining market. Acquisitions remain a possibility, but with only three big players left, the number of hard drive makers is likely to remain stable barring any unforeseen circumstances.
Why Did Most Hard Drive Companies Fail or get Acquired?
The computer hardware market is known for being extremely competitive and punishing to smaller companies. Why did so many once-major hard drive makers end up failing or getting bought out? Here are some key reasons:
Economies of Scale
HDD production requires massive economies of scale to be cost-effective. As storage capacities grew, only the largest HDD makers could afford the R&D and advanced manufacturing capabilities required. Smaller producers could not compete on price.
Commoditization
Hard drives became a commoditized business with extreme price-based competition. Only the largest makers with the lowest costs could survive on razor thin profit margins.
Capital Intensity
HDD production requires multi-billion dollar factories. As technology rapidly advanced, older plants became obsolete quickly. Smaller companies could not afford to build and re-build plants as often as needed.
Technology Expertise
Developing leading-edge hard drive technology requires enormous engineering resources and expertise. As R&D costs have climbed, only the largest manufacturers could keep pace with innovations.
Changing Market Conditions
The HDD market has experienced major shifts, including growth of networked storage and the rise of flash drives and solid state drives. Adapting quickly to market changes gave advantage to large established players.
Consolidation Trends
Like in other maturing tech sectors, acquisitions and consolidation have economic appeal for larger HDD makers to buy out vulnerable smaller players.
In essence, manufacturing hard drives profitably takes enormous scale and resources few companies can match. The industral dynamics naturally led to decline or acquisition of all but the strongest handful of HDD makers.
Outlook for the Hard Drive Industry
Hard disk drives are expected to maintain a key role in mass data storage even with the rise of solid state drives, meaning Seagate, Western Digital, and Toshiba will likely remain major players for years to come. However, the overall HDD market is predicted to slowly shrink over time as SSDs eat into overall demand.
Some key predictions for the future of the hard drive industry:
- Total HDD shipments will gradually decline around 3-10% per year
- Average HDD capacities will continue increasing as technology improves
- Business/high-capacity enterprise HDDs will outlast consumer HDD demand
- At least one of the big 3 makers could leave the market by the late 2020s
- No new major HDD companies will emerge to challenge the big 3
The days of rapid growth and new entrants in the hard drive business are likely over. Barring an unforeseen disruption, Seagate, Western Digital, and Toshiba will dominate what’s left of the slowly shrinking HDD industry. Consolidation down to 2 or even 1 major player is a possibility long-term.
Conclusion
In summary:
- There are only 3 major hard disk drive manufacturers left today: Seagate, Western Digital, and Toshiba
- Dozens of HDD makers existed in the 1950s through 1990s but were acquired, went bankrupt, or exited the market
- Industry consolidation was driven by economies of scale, commoditization, and other economic factors favoring large manufacturers
- The HDD industry is in slow decline with SSDs taking over growth – no new major HDD makers are likely to emerge
- Seagate, Western Digital, and Toshiba will probably remain the only HDD producers unless further consolidation occurs
The days of a dynamic, constantly changing hard drive industry with new companies constantly entering and leaving are over. Barring an unexpected resurgence in HDD demand, the question is whether 2 or even just 1 major hard drive manufacturer will end up dominating the remainder of the mature HDD market.
