Winners, losers in disk-drive IC business

So who is winning--and losing--in the disk-drive chip business? LSI and Marvell are the winners, while Renesas, STMicroelectronics and others are the losers, according to one analyst.

''The hard disk drive semiconductor chip supplier landscape is going through consolidation with STMicro and Renasas no longer actively winning next generation hard disk drive SOC sockets,'' said Craig Berger, an analyst with FBR, in a report.

''This effectively leaves Marvell and LSI as the only competitors remaining in the space,'' he said. ''LSI currently provides hard disk drive chips to customers Seagate and Hitachi, and claims to have about 25 percent share of the overall market. Marvell, with about 50 percent share of the global hard drive chip market, is currently a sole-source supplier with Western Digital, Toshiba-Fujitsu, and Samsung.''

In fact, LSI and Marvell are battling each other on several fronts. LSI could ''will regain enterprise HDD chip shipments at Seagate'' in 2010, according to the report.

''Longer term, we believe Marvell will begin ramping client drives into Hitachi by 2Q '10 and into Seagate by 3Q '10. HDD share gain opportunities in 2010"2011 with Seagate and Hitachi though partially offsetting share losses at Samsung to LSI are possible,'' he added.

In its most recent quarter, Marvell ''posted share gains across the board in HDD, especially in the 2.5-inch space where managment estimates it has 60 percent unit share. Storage revenues were up over 20 percent sequentially, supported by notebooks and a solid improvement in enterprise which continues to recover. We expect the segment to be up (about) 6 percent next quarter, slightly softer than normal seasonality,'' said Daniel Amir, an analyst at Lazard Capital Markets.