Data-storage company Seagate makes hard disk drive components at its factory in suburban Minneapolis. -
The fate of an industry is riding on a laser smaller than a grain of salt.
Data-storage company Seagate developed this diminutive heat source to help it encode information in ever-greater quantities on the spinning magnetic platters of hard disk drives. Stacked by the thousands in data centers, the drives hold everything from home movies to medical records to factory log files.
Seagate’s innovation, heat-assisted magnetic recording, is critical to the future of the globe-spanning manufacturer. Its hard drives are competing against newer and faster technology in the business of storing the world’s information, and to survive, their capacity must continue to increase.
The company has started shipping a paperback-size drive that holds 36 terabytes of data—the equivalent of 1,400 Blu-ray movies. It has achieved nearly twice that in the lab, and its executives think far more is possible.
“We’ve always believed that hard drives had legs,” said Seagate Chief Executive Dave Mosley. “We’ve proven that by continuing to invest in them and see the returns.”
The new products arrive as AI is fueling a surge in demand for data storage. Data centers last year spent an estimated $40 billion on storage devices, according to the consulting firm IDC, and that is expected to grow by 31% over the next two years.
Each wafer Seagate produces holds 100,000 read-write heads, which are used to record information in hard drives. -
Wall Street analysts predict that Seagate’s sales from fiscal 2024 to 2026 will increase by 55%, to $10 billion, while its earnings per share will grow by more than 650%.
IBM invented the hard disk drive in the 1950s, and the storage device has endured while other media such as punch cards, floppy disks and CD-ROMs fell into obscurity. The drives’ capacity grew as their price dropped, and today a one-terabyte consumer model, which can hold tens of thousands of high-resolution photos, costs less than $70.
But in the 1990s, hard drives’ most formidable challenger emerged. Solid-state drives store data as electrons, allowing them to read and write faster than hard drives.
Solid-state drives are more expensive than hard drives on a per-terabyte basis, but the disparity has steadily declined. They have become the default in personal computers, and some in the industry say it won’t be long until they take over data centers too.
John Colgrove, founder and chief visionary officer of Pure Storage, a company that designs storage systems, said it is now shipping 150-terabyte solid-state drives called DirectFlash.
Their capacity will quadruple in the next two years, he said, and that growth, coupled with what he called solid state’s lower demand for power, will quickly erode hard drives’ cost advantage.
“The debate isn’t will hard drives go away—it’s when will they go away,” Colgrove said.
Hard drives write by flipping the magnetic orientation of tiny “bits” up or down. That action denotes them as a one or a zero, the binary code that makes up the digital language.
Seagate and other manufacturers have managed to make those bits smaller and smaller, but in conventional hard drives, they are approaching a limit beyond which they would become too unstable to control.
Enter heat-assisted magnetic recording, or HAMR, a technology Seagate has been developing for more than 20 years. The new drives use a laser to apply a nanosecond of heat to bits smaller than any used before, allowing them to be magnetically manipulated.
The read-write heads that record information are made in vast clean rooms in Seagate’s suburban Minneapolis factory. On a recent morning workers in masks, gloves and hooded coveralls operated machines that deposited or etched away layers of material atop 8-inch-wide ceramic wafers. The room was bathed in yellow light that wouldn’t interfere with photosensitive chemicals used in the process.
Each wafer, which workers carried from station to station in lunchbox-size cases, held 100,000 heads. Once complete, the wafers would be flown to Thailand, where other staffers would attach the lasers and assemble the drives.
The clean room’s yellow light doesn’t interfere with photosensitive chemicals used in the manufacturing process. -
Seagate said two large cloud-computing customers have each ordered one exabyte’s worth of HAMR storage, which works out to tens of thousands of hard drives.
Irving Tan, CEO of Western Digital, Seagate’s main competitor in hard drive manufacturing, said HAMR drives could eventually hit 100 terabytes, and after that, a technology that is still in the R&D phase might take over. Known as heat dot magnetic recording, it aims to write on even smaller particles.
IDC says hard drives account for more than 80% of data center storage, but solid-state drives have been nibbling away at that dominance.
Some data centers prioritize solid state, saying their customers demand high-speed performance.
Others continue to see the utility of hard drives, including Tampa-based Hivelocity. Chief Operations Officer Jason Burnett said not all operations require data to be available with the speed of solid state.
“There are certain functions, whether archival or backups or something like that, that I don’t care how fast I can access the data—I just need to be able to store a lot of it,” he said.
IDC predicts that by 2028, hard drives will still be one-fifth the cost of their solid state equivalents. It expects data-center spending on hard drives to reach $22 billion that year, a 69% increase over 2024 but less than the $32 billion forecast for solid state.
Brian Beeler, chief analyst of the testing website StorageReview.com, said there currently isn’t enough solid-state-manufacturing capacity to replace hard drives. That reality alone means hard drives will stick around for a while.
“They’re not fast, they’re not that big, they’re not powerful, they’re not anything, but they can hold stuff for a long time really well at an effective cost per terabyte,” he said.
