Seeking Alpha

Western Digital begins shipping helium drives, shares rally

  • Western Digital's (WDC +2.6%) HGST unit (i.e. Hitachi's former hard drive business) has begun shipping its first helium-filled drive. Making good on past promises, WDC's drives offers an unmatched 6TB of storage - existing hard drives top out at 4TB - and is also said to be lighter and much more power-efficient (both with regards to idle and operational power draw) than existing 4TB offerings.
  • WDC says it worked with H-P, Netflix, Huawei, research lab CERN, and "some of the world's largest social media and search companies" (could be a reference to Facebook and Google, who are often tight-lipped about the products going into their data centers) to qualify the drives.
  • Web/cloud service providers are natural customers for WDC's helium drives, given their voracious storage appetites and obsession with maximizing compute/storage densities while minimizing power consumption. WDC goes as far as to argue its helium drives can facilitate liquid data center cooling (viewed as more efficient than air-based cooling) in a way traditional drives can't.
  • WDC's helium drives could give it a leg up on Seagate (STX -0.3%), which has historically derived a larger portion of its sales from the higher-margin enterprise/data center segment. Seagate, which has questioned the viability of helium drives in the past, is aiming to launch 5TB hard drives in early 2014 with the help of a technology called shingled magnetic recording (SMR). WDC plans to have its helium drives support SMR down the line.
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