July 27, 2012, 11:28 AM — After devastating monsoonal floods in Thailand shut down several of its key disk drive plants, drastically hurting its revenue and market standing, Western Digital this week reported record financial results for 2012.
According to market research firm IHS iSuppli, WD has recaptured its disk drive market share lead from chief rival Seagate, returning to pre-flooding drive shipment levels.
According to Seagate's pre-earnings announcement, its revenue for the second quarter of 2012 will be $4.5 billion, with 66 million hard-drive shipments. WD shipped 71 million units for the same quarter, according to IHS iSuppli analyst Fang Zhang.
For the fiscal year 2012, WD reported revenue of $12.5 billion and net income of $1.6 billion, or $6.58 per share for fiscal year 2012, compared with $9.5 billion in revenue for the previous year and net income of $726 million, or $3.09 per share.
For its fourth quarter, which ended June 29, WD reported revenue of $4.8 billion, hard-drive shipments of 71 million and net income of $745 million, or $2.87 per share.
Both WD and Seagate completed mergers with other disk drive makers this year -- Seagate with Samsung and WD with Hitachi GST for $4.3 billion. The mergers increased the intensity of the rivalry between the companies.
WD's 2012 fiscal results included Hitachi GST.
Zhang said WD gained more initially in drive shipments by acquiring Hitachi, which held the number three spot in the hard drive market. Samsung was number five in drive revenue.
"Both have the potential to increase their market share, but now it seems WD has a better lead due to its previous size, as well as good quality products from Hitachi GST," Zhang said. "However, anything can be changed due to enterprise versus client ratio in the future. It is still waiting to be seen."
One major impact on drive shipments will be ultrabooks, lightweight laptops powered by Intel processors that are expected to experience heavy adoption in the third and fourth quarters of 2012.
Ultrabooks will come with either a solid-state drive (SSD) or a combination of a high-capacity hard drive and a low-capacity cache SSD. What will determine its adoption rate will be price.
"The number one issue for PC adoption is pricing. If ultrabook pricing is $900 or above, adoption will be very difficult," Zhang said.
