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Hard drive controllers do exactly what they sound like: control your computer's hard disk. They are the circuitry involved in running hard disks and getting them to do what they are supposed to. On IDE drives, the hard drive controller is actually part of the drive. In older hard drives, controllers were separate boards.
With a typical IDE hard drive, you can have up to four devices directly connected to the motherboard. An example would be the hard drive, floppy drive, CD-ROM, and DVD drives. If all the spots are used up, you would need to purchase another hard drive controller card. Sometimes the hard drive controller can fail and you will need to replace it. You need the same type of controller as your hard drive. For example, IDE drives are only compatible with IDE controllers, and SCSI drives need SCSI controllers.
If you get an error that says "HDD controller failure" upon booting your computer, it usually means the hard disk drive (HDD) controller has failed. Sometimes, you will get a 1701 error, which means the hard drive controller and the drive are having trouble communicating. This might be due to a loose connection.
The best way to avoid losing data is to prevent loss by backing up. With the low cost of external hard drives this is a ideal solution. By making regular copies of your important files, or by cloning your entire hard drive setup, you'll save yourself a ton of trouble in the event that your hard drive ever goes bad.
WARNING: Products with exposed solder may contain lead, a chemical known to the State of California to cause cancer, birth defects and other reproductive harm. Please wash hands after handling internal components and motherboards and avoid inhalation of fumes if heating the solder.