THE INVESTMENT APPROACH OF CALVIN TAN

AI (Artificial Intelligence) Boom Time Sudden Turnaround The Fortunes of HDD (Hard Disk Drive) Makers, Calvin Tan

calvintaneng
Publish date: Mon, 27 May 2024, 12:35 AM
calvintaneng
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Hi Guys,

I have An Investment Approach I which I would like to all.

Dear friends of i3 Forum


If anyone has read about the decline of HDD sales over the past few years one must have thought that HDD going into a Sunset industry.

But No!

There is A SUDDEN TURN OF FORTUNE!


SEE VERY VERY VERY CAREFULLY THE REASON WHY?


1. FROM SEAGATE


Seagate joins the HDD price hike party, blames AI for spike in demand 

Tue 23 Apr 2024 

comment bubble on white

Expect ongoing supply shortages this year, say storage analysts


READ AGAIN


Seagate.... blames AI for spike in demand

Seagate has joined Western Digital in increasing the prices of hard drives, with rising demand due to the huge data requirements of AI taking the blame. AI is also behind a rapid growth in orders for Enterprise solid state drives (SSDs).

One of the big three makers of traditional rotating hard disk drives (HDDs), Seagate informed customers that it is increasing prices effective immediately for new orders, but also for any changes to orders that are “over and above” previously committed volumes.

This was disclosed in a letter from the company seen by analyst Trendforce, and comes just a couple of weeks after rival manufacturer Western Digital sent out a similar letter to customers informing them of price hikes.

According to Trendforce, the cause of the issue is two-fold: rising demand for high-capacity HDD products driven by the current craze for all things AI, and reduced production by hard drive manufacturers that means they are unable to meet the demand, leading to soaring prices.

The rising demand comes from AI training requiring huge volumes of data: OpenAI's GPT-3 model is said to have been trained using 45TB of data, which may have been surpassed for newer models. And while flash-based SSDs boast high-speed and low-latency, storing everything in flash would still be costly. Seagate launched a 30TB hard drive line last year.

Hard drive production was cut by as much as 20 percent over the last two years or so because of falling orders during the pandemic, and now manufacturers are unprepared for a sudden uptick in demand.

This was pointed out in a blog late last year by Finis Conner, one of Seagate’s founders.

“We can point the finger at COVID. Reduced global business and manufacturing activity during the pandemic caused a decrease in demand for disk drives and cloud storage. This resulted in a massive surplus in hard drive supply. It’s temporary, but the HDD surplus is still hurting sales and negatively impacting HDD stocks,” Conner wrote.

The danger is that it will take a long time to fire up the HDD production engine again, he warned, and there are now only three suppliers in the world: Seagate, Western Digital and Toshiba. So it looks like buyers may face inflated prices for the foreseeable future.

Trendforce says there is an expectation of ongoing supply shortages for high-capacity HDD products this quarter and potentially throughout the entire year. HDD prices are expected to continue rising in the second quarter of this year, with hikes estimated at 5 to 10 percent.

The analyst also reckons that AI is behind increasing demand for QLC enterprise SSDs to kit out inferencing servers, at least from North American customers.

Bit shipments of QLC enterprise SSDs are forecast to reach 30 exabytes in 2024, which Trendforce calculated to be a fourfold increase in volume compared with 2023.



The outlook then is that AI demand is likely to see a price increase for both HDD and SDD datacenter products in the near future, at least if TrendForce is right. ®








Calvin comments:

So the Spike Up in Demand is Caused By Ai (Artificial Intelligence)


DELL CEO said the same


Michael Dell: AI to drive data center demand up 100x over next 10 years

AI 'revolution' will boost data center capacity, CEO of Dell says

Dell’s founder and CEO has said that data center capacity will have to increase by 100x from current levels over the next 10 years.

“There definitely needs to be a big build-out of data center capacity for sure.”

He added: “We could need 100 times more of this in 10 years than we have today.”

Dell attributed the increase in data center demand to the rising interest in AI services, and explained that people will learn that they can get better results from generative AI models.

He said we are only in the first or second year of “the big AI revolution” and predicted that the growth of AI will be 10x faster than the growth rate of the Internet.

“The cost of having a cognitive superpower is approaching zero,” he said, noting that society is shifting towards using machines for “cognitive power” rather than computing and coding.

Dell, whose company sells hardware that powers AI workloads, added that the shift will require a new architecture, compute, memory, network, software model, and build to support it.

Dell said bringing AI to the enterprise was “an enormous priority.”

“Customers want to bring AI to their data, not the data to their AI, he said, explaining that 75 percent of data is stored on-prem, rather than in the cloud, because companies want their data to be only for their and their customers’ benefit.

At the end of last year, Dell Technologies planned to sell $150m of AI hardware to AI start-up, Imbue.



Read again


Dell attributed the increase in data center demand to the rising interest in AI services


He said we are only in the first or second year of “the big AI revolution” and predicted that the growth of AI will be 10x faster than the growth rate of the Internet.


THIS PHRASE IS VERY SIGNIFICANT!

 we are only in the first or second year of “the big AI revolution”


THAT MEANS BULL RUN FOR HDD JUST ONLY STARTED!!


“Customers want to bring AI to their data, not the data to their AI, he said, explaining that 75 percent of data is stored on-prem,


ON- PREM means on Premises

They all WANT TO BUILD OWN "MINI" DATA CENTER ON THEIR OWN COMPANY PREMISES


This reminds us of long long ago when we only use fixed line phone in office, And few even own a phone line at home in the 1950s and 1960s. We have to go find public phone booth to make calls


Fast forward to today. Everyone owns a Hand Phone!


SO FROM HERE WE SEE COMPANIES TURN FASHIONABLE HAVING A "PRIVATELY OWNED DATA CENTER"


THIS WILL CREATE A VERY HUGE DEMAND!

Instead of 10,000 Data Centers now we might SEE MILLONS AND MILLIONS OF OFFICES IN COMPANIES ALL WITH OWN ON-PREM OR "MINI" DATA  CENTERS


Why Oh Why?

because companies want their data to be only for their and their customers’ benefit.



What is On-premises? 'On-Premises' (“on-prem” or “on-premise”) means that local software is installed and runs on computers in your company's own IT environment. From your company's offices, you can choose whether to manage and maintain servers, etc., or whether an external IT provider should be responsible for this.





Imagine:

Everyone avoid going to Public Swimming Pool & build their own "Private" Swimming pool

Or everyone avoid taking International Airplane & fly their own "private" jet?


THE DEMAND BY THESE MULTIPLIED MILLIONS ALL OVER THE WORLD WILL CAUSE HUGE INCREASE FOR STORAGE

VERY GOOD FOR HDD!

No wonder DELL CEO said

Michael Dell: AI to drive data center demand up 100x over next 10 years


NO WONDER THAT DEMAND FOR BOTH HDD AND SSD SUDDENLY SPIKED UP


AND ALL THREE : WESTERN DIGITAL, SEAGATE & TOSHIBA SHARE PRICES ALL UP IN UNISON


AS NOTION, JCY & DUFU ARE HDD PARTS SUPPLIERS TO THEM THEIR STOCK PRICES TOO, ARE BOUND TO FOLLOW


Very Warm Regards


Calvin Tan


Please buy or sell after doing your own due diligence or consult your remisier/fund manager







Discussions
Be the first to like this. Showing 4 of 4 comments

calvintaneng

Creators of famous Sophia robot reveal AI robotics for children, elderly | Nightline

https://www.youtube.com/watch?v=JRHdnkUjcZg

2 weeks ago

calvintaneng

SEE MALAYSIA MENTIONED IN DATA CENTER NEWS

https://www.datacenterdynamics.com/en/news/

only Seagate, Western Digital & Toshiba supply HDD to all these thousands of DATA Centers Worldwide

JCY
NOTION
DUFU

WILL BENEFIT TREMENDOUSLY

FROM NOW TILL REST OF THE DECADE THE HOTTEST THEME IS AI AND DATA CENTERS

2 weeks ago

calvintaneng

SEE MALAYSIA MENTIONED IN DATA CENTER NEWS

https://www.datacenterdynamics.com/en/news/

only Seagate, Western Digital & Toshiba supply HDD to all these thousands of DATA Centers Worldwide

JCY
NOTION
DUFU

WILL BENEFIT TREMENDOUSLY

FROM NOW TILL REST OF THE DECADE THE HOTTEST THEME IS AI AND DATA CENTERS

2 weeks ago

calvintaneng

SEE THIS LIFE LIKE SUPERCOMPUTER AI TALKING FAST AND VERY INTELLIGENTLY

https://www.youtube.com/watch?v=xvNvj7ku5pY

WATCH VERY CAREFULLY TILL THE VERY END
IT NEEDS BACK UP BY 280,000 CPU OF DATA CENTER!


THAT IS HOW DEMAND FOR DATA CENTER WILL SKYROCKET

THEIR SUPER INTELLIGENT KNOWLEDGE IS TRANSMITTED AT THE SPEED OF LIGHT THROUGH OPTIC FIBER WITH INFO TRANSMITTED
FROM DC

2 weeks ago

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