Seagate Technology is one of the largest manufacturers of hard disk drives in the world and a renowned maker of storage solutions. There has been some speculation recently over whether Seagate is still actively manufacturing hard drives and providing data storage products amidst evolving industry trends. This article will analyze Seagate’s current market position and operations to determine if the company remains an active participant in the data storage business.
Brief History of Seagate
Seagate Technology was founded in 1979 and originally incorporated under the name Shugart Technology. The company was focused on developing 5.25-inch hard disk drives for personal computers. Throughout the 1980s and 1990s, Seagate launched several innovations in hard drive storage capacities and form factors. It remained one of the largest suppliers of hard drives through the rise of network-attached storage and cloud computing in the 2000s.
In 2000, Seagate acquired rival hard drive manufacturer Conner Peripherals to grow its market share. Over the next decade, Seagate acquired other data storage companies including Maxtor, MetaLINCS, and LaCie. The company also moved into producing solid-state drives alongside traditional hard disk drives. In 2010, Seagate spun off its network storage division as Seagate Technology Public Limited Company while retaining the core hard drive business as Seagate Technology LLC.
As of 2022, Seagate Technology Public Limited Company remains one of the “big three” manufacturers of hard drives, alongside Western Digital and Toshiba. The company produces a wide range of storage solutions including hard drives for consumer and enterprise use, solid-state drives, storage servers, and cloud storage services.
Seagate’s Current Product Offerings
Seagate continues to manufacture a robust portfolio of hard drive and solid-state drive products for both consumer and enterprise markets. Some of their current product lines include:
- BarraCuda – Performance hard drives for PC gaming and creative pro computing
- IronWolf / IronWolf Pro – Hard drives purpose-built for NAS devices and RAID servers
- SkyHawk – Surveillance focused drives built for security systems
- FireCuda – Solid-state hybrid drives offering speed and large capacities
- Nytro – High-performance enterprise and data center solid-state drives
- Exos – Hard drives and solid-state drives optimized for enterprise servers and storage systems
- Lyve Drive Rack – Modular enterprise NAS storage solutions
Seagate continues to release new models and capacities across its consumer and enterprise hard drive and solid-state drive lines on a regular basis. The company also provides data recovery services for damaged drives as well as a range of storage enclosures and accessories.
Seagate’s Market Position
According to data from TrendFocus and other analysts, Seagate maintained a 30-31% unit share of the total hard disk drive market as of Q3 2022. This places them in second place behind Western Digital, which holds around a 36% share. Seagate retains a strong market presence particularly among enterprise customers requiring high-capacity drives.
In the solid-state drive market, Seagate holds around a 3-5% share and is focused primarily on enterprise SSDs rather than consumer drives. The company is working to expand their share of the SSD market which is expected to overtake HDDs in overall storage revenue by 2025.
Some key facts about Seagate’s market position currently include:
- Global HDD unit shipments in Q3 2022 – Seagate shipped approximately 31.8 million hard drives
- Enterprise HDD revenue market share in Q3 2022 – Seagate held 44.4% share versus Western Digital at 40.6% share
- Total storage revenue in FY2022 – $11.7 billion, consisting of 63% HDD and 37% non-HDD business
- Approximately 25% of enterprise servers shipped used Seagate drives as of Q3 2022
While the HDD market as a whole has been declining around 10% annually, Seagate continues to retain a strong market share particularly among business customers. The company is investing heavily in technology like heat-assisted magnetic recording to push drive capacities higher and retain HDD density advantages over flash memory and SSDs.
Seagate’s Manufacturing Operations
Seagate continues to manufacture a substantial portion of its hard drives and other products in-house. The company currently operates major manufacturing facilities in:
- Springtown, Northern Ireland
- Fremont, California
- Wuxi, China
- Penang, Malaysia
- East Ayrshire, Scotland
Each site supports different aspects of development and production:
- Springtown – Drive development as well as high-capacity hard drive production
- Fremont – Production of enterprise-class hard drives
- Wuxi – Development and production of storage solutions for Asian markets
- Penang – Volume production of drives for desktops, laptops, and consumer devices
- East Ayrshire – Development of recording head and media technologies
Seagate also partners with several contract manufacturers and suppliers in Asia to produce components and drives. However, the company handles final assembly and extensive testing of drives in-house before shipment to customers. This ensures quality control and protects proprietary technologies.
In FY2022, Seagate shipped around 178 exabytes of total storage, equivalent to over 500 million hard drives. The company’s substantial production capabilities and technological expertise underpin its position as a leader in data storage.
Recent Seagate Product Announcements
Over the past year, Seagate has continued to refresh its product lines across consumer and enterprise segments. Some notable new releases demonstrating Seagate’s active development and production of drives include:
- September 2022 – 22TB hard drives for network-attached storage and RAID arrays
- August 2022 – 5TB portable external USB-C SSD for consumers
- July 2022 – Mach.2 Exos 2U enterprise hard drives offering 288TB+ in a compact form factor
- June 2022 – FireCuda 530 M.2 NVMe SSD for gaming PCs offering 7300MB/s speeds
- May 2022 – IronWolf 525 NAS SSDs optimized for multi-user performance
- April 2022 – 2TB FireCuda CXL SSD drives with PCIe support for workstations
Seagate is actively engaged in manufacturing drives using the latest technologies including multi-actuator arms, PCIe Gen 5, NVMe interfaces, onboard cache doubling, and increasing areal density. The company is shipping drives in new form factors optimized for enterprise servers, data centers, creative workloads, and the metaverse.
These product launches demonstrate that Seagate continues to innovate and remains highly competitive in the storage hardware business rather than simply winding down HDD production.
Seagate’s Financial Performance
Seagate Technology’s quarterly and annual financial results further confirm that the company continues to operate successfully as an HDD and storage solutions business. A few highlights of their recent financial performance include:
- Revenue of $11.7 billion in FY2022, up 18% year-over-year
- Hard drive shipments increased to 178EB in FY2022, up 20% YoY
- Q1 2023 revenue increased 29% YoY to $3.05 billion
- Non-GAAP gross margin at 29.5% in Q1 2023 versus 27.3% a year prior
- Over $2 billion in cash flow from operations in Q1 2023
Seagate has managed to maintain profitability and positive cash flow despite declines in legacy markets like desktop HDDs. The company is benefiting from high margins on enterprise drives and new sources of revenue from enterprise storage systems and data management services. Seagate’s financial outlook remains strong for a company at the forefront of the storage hardware industry.
Strategic Partnerships
Seagate cultivates partnerships with major technology firms to incorporate its drives into new solutions. Some notable collaborations demonstrating Seagate’s ongoing business relationships include:
- Microsoft – Providing HDDs and SSDs optimized for Azure cloud infrastructure and Xbox gaming consoles
- ASUS – Supplying Lyve Drive modular storage solutions for ASUS servers
- Lenovo – Producing specialized storage for Lenovo ThinkSystem servers
- AMD – Collaborating on high-speed PCIe Gen5 SSDs for next-gen AMD platforms
- Scale Computing – Integrating Seagate drives into Scale Computing HC3 edge servers
These partnerships to deeply integrate Seagate drives into new hardware and cloud platforms would not exist if the company was planning to phase out hardware production. They demonstrate Seagate’s strategic value to major OEMs and enterprise customers.
Seagate’s Outlook and Strategic Vision
In its latest annual report, Seagate outlined several elements of the company’s strategic vision that point towards continued growth as a storage solutions provider:
- Leveraging expertise in mass data storage as demand grows exponentially
- Targeting growth markets like cloud and edge infrastructure, AI, 5G, autonomous systems
- Providing complete workflow solutions beyond component storage
- Focus on technology leadership in heads, media, and recording technology
- Capturing demand for data-intensive applications through 2030
Comments from CEO Dave Mosley on recent earnings calls also suggest continued commitment to Seagate’s core HDD strengths:
“We are focused on maintaining technology leadership in mass capacity storage while selectively participating in new and adjacent markets.”
“Demand for optimized nearline/high-capacity enterprise drives and mass-capacity hard disk drives is expected to continue outpacing the market.”
Seagate aims to retain market share in HDDs while growing revenue from enterprise systems and services. The company expects mass data growth and increasing storage demands to drive revenue beyond $15 billion by 2026. This outlook is contingent on Seagate maintaining production of drives well into the future.
Is Seagate Moving Away from Manufacturing?
Some analysts speculate that Seagate may eventually transition into primarily a storage solutions provider without its own drive manufacturing. However, there are several reasons why completely outsourcing hardware production remains unlikely:
- Seagate has continued investing heavily in next-gen recording technology R&D to retain market share.
- In-house drive development and manufacturing protects quality control and IP security.
- Enterprise customers rely on Seagate for reliable high-capacity drives not yet commoditized.
- Vertically integrated production enables customization and specialized products.
- Contract manufacturing alone cannot fulfill demand volumes as HDD market consolidates.
While the HDD market is mature, flash memory limitations in density and cost mean HDDs still fill vital needs in mass data storage applications. Seagate’s manufacturing capabilities will remain strategically important for years to come during this technology transition period.
Conclusion
In summary, the evidence strongly indicates that Seagate continues to manufacture hard disk drives and solid-state drives while expanding into enterprise storage systems and services. Key points include:
- Seagate currently ships 30-31% of the world’s hard drives, maintaining a strong #2 market share.
- The company operates major drive production facilities on 3 continents.
- Seagate continues releasing new drive products leveraging cutting-edge technologies.
- Revenue and profits continue growing driven by enterprise data solutions.
- Strategic partnerships dependent on drive supply remain active.
- Management outlook focuses on meeting surging mass storage demand.
While the future may shift Seagate to more service-based offerings, the company remains firmly dedicated to drive development and production for now. Seagate’s substantial manufacturing capabilities and expertise continue to provide unique value in meeting the world’s exponential data storage needs across consumer and enterprise markets.