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Western Digital (WDC)-Samsung Tie Up for Storage Technology

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Western Digital (WDC - Free Report) and Samsung Electronics Co., Ltd. recently signed a memorandum of understanding to unify standards around several advanced storage technologies, beginning with zoned storage solutions.

Per the deal, the companies will collaborate to standardize and push the adoption of next-generation data placement, processing and fabrics (D2PF) storage technologies. Samsung and Western Digital will initially focus on creating a robust and broad ecosystem for Zoned Storage solutions for users and application developers and standardizing this technology.

Storage is the essential basis for how people and businesses consume and use data. Having data storage systems in place can help organizations be more cost-efficient by avoiding unnecessary duplication of information. It also ensures accurate data access for employees to fulfill job requirements and provide exceptional customer service.

Zoned Storage is a class of storage devices that enable both host and storage devices to cooperate in order to achieve higher storage capacities, enhanced throughput and lower latencies. Per Samsung, Zoned Storage is expected to radically transform the way applications utilize the proficiency of storage devices. It will also open doors to boosted performance levels at a low cost.

Western Digital has been working for years toward developing the Zoned Storage ecosystem by contributing to the Linux kernel and open-source software community. This collaboration underscores the unparalleled endeavors of both companies to surpass customers’ needs and deliver advanced Zoned Storage technologies. Their joint efforts will include developing and promoting hardware specifications and software application models to ensure that maximum customers benefit from this state-of-the-art technology.

Apart from being a win for the storage industry, the latest alliance marks the first time that both Samsung and Western Digital have come together as technology leaders to help advance important storage technologies. The partnership will focus on enterprise and cloud applications to promote a range of collaborations around technology standardization and software development for D2PF technologies like Zoned Storage. Through Samsung and Western Digital's partnership, end users can be confident that these evolving storage technologies will have support from multiple device vendors and vertically integrated hardware and software companies.

The companies have already commenced an initiative based around Zoned Storage devices such as ZNS (Zoned Namespaces), solid-state drives and SMR (Shingled Magnetic Recording) hard disk drives. Samsung and Western Digital will also work with the Storage Networking Industry Association and the Linux Foundation to define high-level models and frameworks for enhanced Zoned Storage technologies.

In an effort to enable open and scalable data center architectures, the companies have founded the Zoned Storage TWG (Technical Work Group), which received approval from the SNIA last December.

This collaboration is also expected to expand zone-based (e.g. ZNS, SMR) device interfaces and high-capacity storage devices with enhanced data placement and processing technologies.

Headquartered in San Jose, CA, Western Digital is witnessing robust demand from cloud customers and recovering enterprise and video and image application markets. Strong demand for 18-terabyte (TB) and 20TB energy-assisted drives and enterprise solid-state drives is expected to drive Western Digital’s top line. Demand for the WD Black product line is also rising due to gamers’ preference for more customized solutions. Further, encouraging PC shipment trends led by surging demand for notebooks are likely to support the company’s hard disk drive business.

Shares of WDC have dropped 32.9% in the past year compared with the industry’s fall of 4.6%.

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Zacks Rank & Key Picks

WDC carries a Zacks Rank of 3 (Hold) currently.

Some better-ranked stocks from the broader technology space are Flex Ltd (FLEX - Free Report) , NETGEAR (NTGR - Free Report) and Iridium Communications (IRDM - Free Report) . While Flex sports a Zacks Rank #1 (Strong Buy), NETGEAR and Iridium carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Flex has a projected earnings growth rate of 19.75% for fiscal 2022. The Zacks Consensus Estimate for Flex’s 2022 earnings has been revised upward by 9 cents in the past 60 days.

Flex’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 25.6%. Shares of FLEX have gained 3.9% in the past year.

NETGEAR has a projected earnings growth rate of 31.46% for 2023. The Zacks Consensus Estimate for NETGEAR’s 2023 earnings has been revised downward by 7 cents in the past 90 days.

NETGEAR’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed estimates once, the average surprise being 35.5%. Shares of NTGR have plunged 40.9% in the past year.

Iridium has a projected earnings growth rate of 157.14% for 2022. The Zacks Consensus Estimate for Iridium’s 2022 earnings has been revised upward by 2 cents in the past 60 days.

Iridium’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and met estimates twice, the average surprise being 39.4%. Shares of IRDM have dropped 0.3% in the past year.

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