Shipments of solid-state drives by Western Digital Corp. set an all-time record for the company in the Q2 of 2015. The manufacturer only sells solid-state drives for enterprise and such products represent a small portion of the company’s revenue. Moreover, for WD, hard disk drives bring more profits than NAND flash-based storage devices.
Sales of Western Digital’s solid-state drives for enterprise markets totaled $244 million in the fourth quarter of fiscal 2015 (corresponds to the second quarter of calendar 2015). WD sells all of its solid-state storage devices under HGST brand, which has excellent reputation as a provider of enterprise-class storage. The company does not reveal unit sales numbers of its SSDs, but it expects that shipments of such products will grow going forward.
“Our enterprise SSD revenue more than doubled year-over-year to $244 million demonstrating the continued success and broadening customer acceptance of our leading SAS SSD products,” said Stephen Milligan, chief executive officer of WD, during the earnings conference call with investors and financial analysts. “We expanded our footprint in the enterprise SSD space with the initial ramp of our new Ultrastar PCIe NVMe offering. It is been qualified with several leading customers and we expect revenue from this product to increase throughout fiscal 2016.”
At present sales of SSDs represent around 7.625 per cent of WD’s revenue, which is not a lot to say at least. Moreover, profit margins of Western Digital’s solid-state drive business is below the corporate average of 29.1 per cent. WD fully expects SSDs to replace 10K and 15K rpm solid-state drives in the future, which is why the company will continue to develop more innovative solid-state storage devices.
What remains to be seen is whether WD will reconsider its position regarding SSDs for client PCs. Sales of consumer hard drives are declining and SSDs could be a way to offset revenue declines. Still, in a bid to become a successful maker of solid-state drives, WD needs to secure supply of NAND flash first.
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KitGuru Says: While it is evident that sales of WD’s solid-state drives are growing rapidly, it is clear that Western Digital is not going to become a major enterprise-class SSD supplier any time soon.