News

posted on 13 May 2008 09:37

Reuters reports that the Hitachi conglomerate lost money in its latest quarter. Making its hard disk drive unit profitable is a key part of its overall turnaround plan.

Hitachi has been losing money in Plasma TV screens as well as in HDD sales where it is in the number three position a long way behind Seagate, the leader, and Western Digital.

Hitachi made a net loss of 58.3 billion yen in the financial year to March 2008. It hopes to earn a net profit of 40 billion yen ($386 million) for the financial year ending in March 2009. This is below analysts' expectations of around 64.5 billion yen. The group lost 57.6 billion yen in its latest quarter.

The plasma screen business echoes its HDD business in that Hitachi is number 4 in plasma screens and has neither the manufacturing volume nor the low production costs needed to make a profit.

In the HDD unit it aims to seize market share from the incumbents by a combination of increased capacity and lower production and distribution costs. This is a very challenging task as neither Seagate nor Western Digital are pushovers, far, far, from it. The tools needed to achieve the next jump in areal density through bit-patterned and discrete track media are being sold to all the major HDD players and the starting playing field appears to be level.

From its lagging position Hitachi GST has to achieve a significant and sustainable areal density lead and design in lower production costs for its drives as well as achieving lower distribution costs. At the same time it absolutely cannot compromise drive reliability.

Its engineers have got to be better than Seagate's and Western Digital's; it's that simple. Its manufacturing planners have got to out-plan its competitors's planners too.

There is one option though; there has been no word on increasing drive rotation speed past the current 17,000rpm limit. If Hitachi GST could pull off that technology feat without the drives disintegrating under centrifugal force, perhaps with 2.5-inch drives which would have a lower outside edge speed than 3.5-inch drives, then it would be a significant boost to its prospects.

There are heat and power considerations too that might make faster-spinning drives not the best choice. Perhaps some serious flash solid-state drive use is the way to get HDD IOPS numbers up. 

If Hitachi GST is to make serious inroads into Seagate and Western Digital's market share then it may decide to think outside the box.

^{[Chris Mellor.]}