What's Happening To Storage?

My only post about storage since May, was October's Betteridge's Law Violation, another critique of IDC's Digital Universe, and their constant pushing of the idea that the demand for storage is insatiable. So its time for an update on what is happening in the real world of storage media, instead of IDC's Universe. Below the fold, some quick takes.

We last heard about roadmaps from my good friend Dr. Pangloss more than two years ago when I wrote:

But curmudgeons like me remember that back in 2013 the Doctor was rubbing his hands over statements like:

Seagate is projecting HAMR drives in 2014 and WD in 2016.

In 2016 we hear that:

Seagate plans to begin shipping HAMR HDDs next year.

Seagate 2008

So in three years HAMR has gone from next year to "next year". Not to mention the graph I keep pointing to from 2008 showing HAMR taking over in 2009 and BPM taking over in 2013. So actually HAMR has taken 8 years to go from next year to next year. And BPM has taken 8 years to go from 5 years out to 5 years out.

Now, to the good Doctor's joy, Chris Mellor reports Seagate is out with a new roadmap:

Seagate's 2018 HAMR roadmap

Seagate has set a course to deliver a 48TB disk drive in 2023 using its HAMR (heat-assisted magnetic recording) technology, doubling areal density every 30 months, meaning 100TB could be possible by 2025/26. ... Seagate will introduce its first HAMR drives in 2020. ... The chart ... shows Seagate started developing its HAMR tech in 2016 and that a 20TB+ drive will be rolled out in 2020.

"Seagate started developing its HAMR tech in 2016" is just wrong. In March 2012 the same Chris Mellor reported:

Seagate has demonstrated heat-assisted magnetic recording technology with 1 trillion bits per square inch

So the real-time slip of HAMR technology continues. It has now taken ten years to go from "next year" to "the year after next".

In NAND so it begins: Micron mounts head-on attack against 10K disks, Chris Mellor reports that:

Micron has started shipping its 2.5-inch 5210 ION flash drive, positioning it as a 10,000rpm disk drive replacement offering much better read access performance for more or less the same price. ... The low cost (low for flash, at least) comes from its use of 64-layer 3D NAND in QLC (4bits/cell) form, and it has 1.92TB, 3.84TB, and 7.68TB capacity points. ... It is heavily optimised for reads over writes, with up to 90,000/4,500 random read/write IOPS; it does random writes at just 5 per cent of the random read speed.

It isn't clear how much the drive will cost in volume. It certainly performs better on read-intensive workloads, but QLC has much worse write endurance even than TLC, so these drives cannot replace 10K 2.5" hard drives if writes are even moderately frequent. And they definitely won't be cheap enough to threaten 3.5" nearline drives for bulk storage.

If the demand for storage were truly insatiable and flash were destined to kill off hard drives, we wouldn't be seeing headlines from Tom's Hardware like this SSD Prices Could Drop Over 50 Percent In 2019 - Report:

According to a DigiTimes report citing "industry sources" this week, NAND flash prices are expected to continue to drop in 2019 after already seeing a 50 percent drop this year. Earlier reports said that SSD prices could fall to as low as $0.08 per GB in 2019.

The DigiTimes report noted that the continued drop in prices seems to be primarily due to SSD manufacturers expanding their production capacity to increase profitability, as well as the adoption of 96-layer NAND technology.

and from Chris Mellor at The Register with Flash price-drop pops Western Digital's wallet: Surprise revenue fall with worse to come:

Revenues in the first quarter of fiscal 2019 ended 28 September, were 3 per cent down year-on-year to $5bn. Profits were $511m, down 24 per cent. Operating cash flow was $705m, compared to $1.133bn last year, a 38 per cent drop.

What fouled up was flash. CEO Stephen Milligan said strength in capacity enterprise, surveillance hard drives and embedded flash products, which each grew revenue more than 30 per cent on the year, "was offset by ongoing declines in flash pricing".
...
[Milligan] added:

This softening demand, in combination with increased flash supply, has led to a market imbalance resulting in a deteriorating near-term flash pricing environment.

We are making an immediate reduction to wafer starts and delaying deployment of capital equipment. These actions will reduce our wafer output beginning in fiscal Q3 2019 [April 2019].

Clearly, the increase in the supply of flash bits resulting from new fabs coming on-line and all the major suppliers transitioning to 96-layer 3D has coincided with a significant reduction in the rate of growth of demand for flash bits. To balance supply and demand, the price of flash bits has fallen, reducing the return on the investment in the new fabs and the 96-layer technology.

This less-than-insatiable demand for bits of storage isn't confined to flash. WD's Milligan reported that:

Client compute disk drives also performed poorly.

HDD revenues in the quarter were $2.49bn while flash revenues were $2.53bn. A year ago the numbers were $2.6bn and $2.57bn respectively, so both disk and flash revenues fell on the yearly compare.

WD shipped 34.1 million disk drives in the quarter, compared to 42.2 million a year ago. Client compute drives dropped to 16.3 million from 20.9 million. Non-compute (retail and consumer electronics) units fell to 11.2 million from 15.2 million last year, while data centre units were 6.1 million last year and rose to 6.6 million – a bright spot.

Many of the markets that consume flash are suffering decreasing unit shipments:

• Global Smartphone Shipments Down 6.0% in Q3 2018 as the Leading Vendor and the Largest Market Face Challenges, According to IDC:
  

  smartphone vendors shipped a total of 355.2 million units during the third quarter of 2018 (3Q18), resulting in a year-over-year decline of 6.0%. This was the fourth consecutive quarter of year-over-year declines for the global smartphone market,

• IDC: Tablet shipments decline for 16th straight quarter:
  

  The tablet market has now declined year-over-year for 16 quarters straight. Q3 2018 saw an 8.6 percent year-over-year decline: 36.4 million units shipped worldwide, compared to 39.9 million units in the same quarter last year.

• Lenovo Reclaims the #1 Spot in PC Rankings in Q3 2018, According to IDC:
  

  shipments of traditional PCs (desktop, notebook, and workstation) totaled nearly 67.4 million units, marking a decline of 0.9% in year-on-year terms

The problem isn't just declining unit shipments, it is also slower increase in GB/unit. As I've pointed out, for example in Betteridge's Law Violation, data isn't uniformly valuable; some data is more worth storing than other data and it gets priority for storage. This implies decreasing returns to increasing storage per unit. Who really needs half a Terabyte in their iPhone Xs? Is the extra 448GB over the base model really worth $350? (That's $0.78/GB compared with DigiTimes' prediction of $0.08/GB next year). Whether the device is a smartphone, a tablet, or a PC the market has saturated both in device and GB/device terms.

The one market with increasing demand is "the cloud". It needs some flash for speed, but the bulk of its demand for GB is for hard disk. Here are the hard disk numbers:

• WD shipped 19% fewer drives in Q3 2018 as compared to Q3 2017, but 8% more data center drives.

  Category	Q3 2017	Q3 2018	Change
  Data center	6.1	6.6	+8%
  Client compute	20.9	16.3	-22%
  Non-compute	15.2	11.2	-26%

• Seagate has stopped reporting their declining unit shipment numbers. They now only report Exabyte shipment numbers:
  
  

  Category	Sub-category	Q1 fy'18	Q1 fy'19	Change
  Enterprise	Mission-critical	2.1	3.0	+43%
  	Nearline	25.1	42.5	+69%
  Edge non-Compute	Consumer Electronics	13.5	23.4	+73%
  	Consumer	11.1	11.2	+1%
  Edge Compute	Desktop + Notebook	18.6	18.7	+0.5%

  Note the dominance of nearline drives in Exabyte terms. Given the increase in drive capacity, the consumer, desktop & notebook shipments must have decrease dramatically.
• Toshiba shipped 23.4M units:
  

  Category	Q3 2017	Q3 2018	Change
  Nearline/hi-cap	1,205,000	1,299,000	+8%
  2.5" enterprise	1,290,000	1,595,000	+24%
  2.5" mobile/CE	16,600,000	15,720,000	-5%
  3.5" desktop/CE	5,605,000	4,820,000	-14%

  

  Source

  The graph shows that, over time, nearline drives have been comprising the whole of Toshiba’s growth in the enterprise market.