The details are in Paul Kunert's ironically headlined WD, Seagate romp over Q3 finishing with glorious sales and profit. The sub-head is more accurate:
Oh no, sorry that was another quarter in a different year - top and bottom lines wobble amid corp procurement slowdownAs in the previous quarter, Western Digital had the worst of it:
sales for the quarter ended 29 March fell 26.7 per cent year-on-year to $3.7bn, with hard disks down 20.4 per cent to $2.1bn and flash sliding by a third to $1.6bn. As a result the bit biz lot $374m for the quarter.Seagate was less unhappy:
The sequential average selling price per gigabyte declined 23 per cent. WD now expects total disk exabyte shipments in capacity to be flat or slightly up this year.
Gross profit for the quarter fell to $579m from $602m a year earlier, operating expenses dropped by $40m to $973m, leaving a loss from operations of $394m, versus an operating profit of $914m in Q3 ’18.
Interest expenses and income, along with tax, resulted in a net loss of $581m, versus a net profit of $61m.
revenues came in a $2.31bn, down 17.5 per cent year-on-year. ... Demand for product from the hyperscale vendors was up “slightly” but not enough to “fully offset the slower demand from OEM and others global cloud customers”.Why did "cloud service providers" have an "inventory build-up during calendar 2018"? Because the demand for storage from their customers was even further from insatiable than the drive vendors expected. Even the experts fall victim to the "insatiable demand" myth.
“As a reminder, demand for our Nearline drives began to slow in the December quarter, as cloud service providers work through the inventory build-up during calendar 2018. However, we anticipate this pause to be short lived”.
Seagate shipped 77 exabytes of capacity in the quarter, down 12 per cent sequentially.
As for the rest of its results, operating expenses fell 12 per cent to $2.01bn. Operating profit was $236m, versus a profit from ops of $441m a year earlier. Interest income and expenses left net profit at $195m, down from $381m. Earnings per share were just $0.69, less than half compared to this time last year.
In Apple and Samsung feel the pain as smartphone market slumps to lowest shipments in 5 YEARS, Kunert reports that the demand for flash memory is equally far from insatiable:
Figures from analyst Canalys show that 313.9 million handsets were shifted in the three months, down 6.8 per cent - the sixth straight quarter of shrinkage in a sector that has given consumers little reason to upgrade.These high-end smartphones are a big part of the demand for flash memory.
Chaebol Samsung, which filed its calender Q1 yesterday, held onto the top spot by some margin - though a 10 per cent decline in sales to 71.5 million clipped its market share from 23.6 per cent a year ago to 22.8 per cent. Huawei snuck into second spot with 50 per cent climb in shipments to 59.1 million, giving it a 18.8 per cent share of sales, versus 11.7 in Q1 '18.
The troubles continued at Apple, following a disappointing Xmas holidays quarter, as it reported 40.2 million unit shipments, down 23.2 per cent, reducing its share to 12.8 per cent from 15.5 per cent.
Chris Mellor's NAND down we goooo: Flash supplier revenues plunged in first quarter reports that the misery wasn't just for hard disk vendors:ReplyDelete
"Oversupply is a pain in the collective rear for flash suppliers – a price crash caused market revenues to slump by almost a fifth to $10.792bn in calendar Q1 compared to the prior quarter.
Not everyone suffered equally in the quarter, according to the stats compiled by researcher DRAMeXChange: SK Hynix's revenues were down 35.5 per cent to $1.024bn but Intel dropped 17.3 per cent to $915m."
For a change, there's good news for flash vendors! Chris Mellor's One teeensy little 13-minute power cut, and WD you look at the size of that chip supply cut! reports that:ReplyDelete
"A power failure in Yokkaichi, Japan has thrown Toshiba and Western Digital’s flash supply into chaos - and will have a significant knock-on effect on global supplies, say analysts.
The temporary loss of manufacturing capacity will reduce global flash supplies around 24 per cent between August and October, say analysts, and this, in turn, may fuel short-term price rises of 5 to 10 per cent.
On June 15, a 13-minute outage hit Japan's Yokkaichi region, where Toshiba Memory Corporation (TMC), WD's joint venture partner, produces flash chips."
Max Smolaks' DRAM, is it cold in here? Semiconductor market expected to shrink 12% in 2019 shows it isn't just storage:ReplyDelete
"With average prices for semiconductor components going down dramatically in 2019, especially DRAM and NAND, major chipmakers have been forced to reduce their production output. As a result, the silicon market is expected to shrink by 12 per cent year-on-year."
Smolaks' report was based on a report from IC Insights. Gartner is even less optimistic, as Paul Kunerts reports in God DRAM you! Prices to slide more than 40% in 2019 because chip makers can't forecast.ReplyDelete
An additional reason why the Kryder rate has been less than the roadmaps expected was revealed by Shaun Nichols in NHK Spring cops to hard drive price fixing, coughs up $28.5m fine – and promises to sing like a canary:ReplyDelete
"US prosecutors say that from May 2008 until April 2016 NHK Spring conspired with other unnamed factories to artificially inflate the prices they charged drive makers for suspension assemblies – the part of the arm that holds hard disk read/write heads in place.
NHK Spring will plead guilty to one felony count of violating the US Sherman Act on conspiracy. The Yokohama-based manufacturer will also shell out a $28.5m fine, and agrees to cooperate with investigators on further investigations."