TL;DR: Cryptocurrency Chia has generated demand for hard disk drives to skyrocket in Europe. As many feared when it established, this has resulted in shortages and rising prices, forcing Seagate and Western Digital to ramp up production of their HDDs.
The Chia blockchain uses a”proof of space and time” model instead of”proof of work” (Bitcoin) or”proof of stake” (Etherium 2.0), meaning individuals can farm the crypto by devoting their fresh disk space. It’s already resulted in some 500% growth in Adata SSD earnings and warranty warnings; Chia farming can reportedly ruin a 512GB SSD in 40 days.
According to research company Context (via The Register), European sales of enterprise-grade nearline storage drives of 10TB capacity were only under 200,000 in April, representing 240% stunted expansion. It was a similar story for consumer-grade NAS HDD earnings, which have been upward 167% YoY to ~250,000.
Even sales surveillance disk drives, designed for use in surveillance systems, are upward 116% despite”no specific event in surveillance to cause that growth,” senior venture analyst Gurvan Meyer told The Reg.
Chia, like many cryptos, has seen its price fall recently, but demand for HDDs stays high
Much in precisely the exact same way that the high need for graphics cards is boosting manufacturers’ bottom lines, Seagate has upped its revenue forecast for the current quarter due to”an increase in the crypto farming requirement,” CFO Gianluca Romano told investors.
Both Seagate and Western Digital are capitalizing on Chia-induced demand by ramping up production of HDDs following years of reducing production capacity as consumer demand declined. “This brand new [Chia cryptocurrency] demand is basically helping us to enhance […] from the short term, and bridge from a scenario of underutilized capacity into a situation of nearly fully utilized capacity,” Romano added.
Western Digital’s CFO Bob Eulau offered a similar view:”[…] we will see how the Chia scenario plays out unnaturally, it has largely influenced volumes in the station. And we went through a period where we have pretty lean Concerning channel stock, and we’re work