Summary
Seagate Technology Holdings plc (STX) announced on December 3, 2024, via an 8-K filing, an update from their CEO, Dave Mosley, concerning the company's progress and production challenges. A key development is the successful qualification of their Heat-Assisted Magnetic Recording (HAMR) based Mozaic drives with major customers, including a leading cloud service provider. The company anticipates commencing initial volume shipments of these HAMR drives to this customer in the coming weeks, signaling a significant step forward in their next-generation storage technology. However, the filing also disclosed a production output issue. Seagate is experiencing delays in bringing existing production equipment back online to meet a strengthening HDD demand environment. This process is taking longer than initially anticipated and is expected to result in lower production output for the fiscal third quarter ending March 28, 2025. The company estimates an associated revenue impact of up to $200 million for that quarter. Despite this, Seagate's fiscal second quarter ending December 27, 2024, is currently tracking in line with management's expectations for both revenue and profitability.
Key Highlights
- 1Seagate has successfully qualified its HAMR-based Mozaic drives with key customers in the Mass Capacity markets, including a leading cloud service provider.
- 2Initial volume shipments of HAMR products are expected to begin in the coming weeks.
- 3A strengthening HDD demand environment is noted.
- 4Production output for the fiscal third quarter ending March 28, 2025, will be lower than previously expected due to delays in bringing production equipment online.
- 5This production shortfall is expected to impact revenue by up to $200 million in fiscal Q3 2025.
- 6Seagate's fiscal Q2 2025 (ending December 27, 2024) revenue and profitability are currently trending in line with management expectations.
- 7The CEO will participate in a fireside chat at the UBS Global Technology and AI Conference on December 3, 2024.