New Signals for HDD, as Vendors Refocus and Tighten Capacity Strategies

The global storage market is entering a more selective, strategically disciplined phase, as vendors reassess product portfolios, profitability and long-term demand signals. According to Futuresource Consulting, recent speculation around HDD supply, SKU rationalisation and capacity allocation reflects deeper structural shifts underway across the storage ecosystem.

Rather than signalling retreat, Futuresource analysts view these moves as part of a broader recalibration, shaped by changing capacity needs, margin pressures and a growing divide between enterprise-led demand and consumer-facing segments.

“What we’re seeing is a much more deliberate approach to portfolio management,” says Mats Larsson, Principal Analyst at Futuresource Consulting. “Storage vendors are prioritising where value is created, which capacities make sense to support, and how best to balance branded products with OEM commitments.”

AI workload demands and the HDD opportunity

Futuresource’s outlook is shaped by a highly constrained supply environment across both HDD and SSD. Ongoing SSD shortages in the channel market, driven by strong enterprise and datacentre demand linked to AI workloads, are creating near-term conditions that support HDD demand as a viable alternative.

According to Futuresource’s latest worldwide forecasts, internal HDD channel sell-in is expected to remain relatively stable through to 2027, at around 23 million units annually, before flattening in 2028 and gradually declining later in the decade. By contrast, internal SSD volumes continue to be heavily influenced by enterprise prioritisation, limiting availability for consumer and commercial channels in the near term.

This dynamic is being reinforced by persistently high NAND flash prices, which are limiting SSD affordability across both consumer and commercial applications, as well as delaying expected price-driven migration away from HDD.

A key factor is Micron’s strategic decision to exit client NAND manufacturing and refocus capacity on enterprise and datacentre segments. The move, which includes discounting and winding down its Crucial-branded client products, is expected to create short-term supply gaps in client SSD and memory markets, which other manufacturers are unlikely to fully offset.

SKU rationalisation and market realities

Recent market discussions around specific HDD product lines highlight a clear move away from lower-capacity, lower-margin SKUs, alongside a stronger focus on higher-capacity internal drives. This is coupled with continued commitment to external storage categories, where demand remains resilient.

Futuresource’s latest forecasts show external storage channel sell-in at a 60/40 volume split in favour of HDD in 2026. While external HDD volumes are expected to edge down over the long-term representing 44% of market volume by 2030, total external storage sell-in is projected to rise, driven by accelerating external SSD adoption as availability improves and pricing normalises.

“Clearing out less profitable SKUs is a logical response to how the market has evolved,” says Larsson. “What matters now is how vendors allocate manufacturing and capacity across branded and OEM channels. Clear manufacturing strategies will be critical in the months ahead, particularly as enterprise and datacentre demand continues to absorb a disproportionate share of HDD and NAND supply.”

Digging beneath the headlines

While short-term speculation often focuses on individual vendors or product changes, Futuresource’s annual storage forecasts also take a wider view. They track how HDD and SSD demand interact across consumer, commercial and enterprise applications. This includes pricing dynamics, supply constraints, capacity transitions and regional variation.

“The storage market doesn’t move in isolation,” says Larsson. “Decisions around NAND allocation, enterprise prioritisation and channel supply all ripple through the ecosystem. Our role is to help clients understand those connections and plan accordingly.”

As storage markets grow more complex and capacity decisions carry greater strategic weight, Futuresource Consulting continues to deliver forward-looking analysis, scenario modelling and ongoing market intelligence that goes far beyond publicly available data. In 2026 and beyond, access to that deeper layer of insight is becoming increasingly critical.

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About Futuresource

Futuresource Consulting provides the insights that power the world’s leading technology and media companies. For more than 30 years the firm has combined rigorous data, sector expertise and a forward-looking view of market change. Its syndicated research, consulting services and industry partnerships span consumer electronics, entertainment, Pro AV, education and emerging technologies.

www.futuresource-consulting.com

Press Contact: Nicola Finn, Marketing Manager, Futuresource Consulting, nicola.finn@futuresource-hq.com