Roundup: Hard Disk Drive Shortages & Pricing
November 7th, 2011 By: Colleen Miller
Severe flooding in Thailand has led to more than 500 deaths and extensive property damage. In addition to the human toll, the flooding has had a devastating impact on the Thai economy, including some of the world’s leading production facilities for hard disk drives. Here’s a roundup of the notable media coverage of the impact of these production halts on the availability and pricing of hard disk drives.
Thailand Flooding Cripples Hard-Drive Suppliers (NYTimes.com) – Consumers worldwide could see increases of at least 10 percent in the price of external hard drives because of the flooding, according to Fang Zhang, an analyst at IHS iSuppli, a market research company. The effect will be less noticeable for laptops and desktop computers, he estimated, because demand has been weakened by the current global economic malaise. The world’s biggest names in hard-drive manufacturing, for example, operate from Thailand, where suppliers and customers come together. Until the floodwaters came, a single facility in Bang Pa-In owned by Western Digital produced one-quarter of the world’s supply of “sliders,” an integral part of hard-disk drives. Over the weekend, workers in bright orange life jackets salvaged what they could from the top floors of the complex. The ground floor resembled an aquarium and the loading bays were home to jumping fish.
Thailand Floods Causes Hard Drive Prices to Soar (Techie Buzz) – Last month, some of Thailand’s biggest industrial estates including Nava Nakorn, Bang-Pa-in, Hi-Tech, Factory Land, Rojana, and Saha Rattana Nakorn were flooded. Among the companies impacted were Western Digital, Toshiba, and Seagate. So far, Seagate’s factories haven’t been directly affected; however, the Dublin based storage giant is suffering from component shortages.
Serious Hard Drive Shortage Expected for at least 2 Quarters (James Hamilton) – The floods are far from over and, as we look beyond the immediate problem in country, the impact on the technology world is expected to continue for just over a year even if the floods do recede in 3 to 4 weeks as expected. Disk drives are particularly hard hit with Digitimes Research reporting that the flood will create a 12% HDD supply gap in the 4th quarter of 2011 and the gap may increase into 2012. Digitimes estimates the 4Q11 hard disk drive shortage to reach 19 million units.
1TB Hard Drive Prices Up 180 Percent in One Month (Zorinaq) – “Shortages have caused phenomenal hard drive price increases. Over the past month, I observed on (online computer retailer) Newegg 1TB SATA hard drives went from $50/TB to $140/TB, +180%, almost triple the price …. Large-scale data center operators who are currently growing very rapidly with a focus on storage must be financially impacted by the situation.”
Retailers Rationing Hard Drive Inventory (Storagezilla): “A visit to two competing retailers across the city confirmed a shortage of external hard drives with only the higher end Media & Home NAS devices on the shelves.”
More Demand for Flash? (The Register) – Flash storage suppliers such as OCZ and Micron anticipate a rise in solid state storage demand as frustrated drive buyers trade up, but this is a drop on the ocean as flash fab capacity cannot simply ramp up to cover the missing drive gap, even if flash prices made that an affordable prospect.
Seagate Sees Q4 Drive Industry Unit Shortfall (Forbes) – Seagate said in an SEC filing that it expects a huge gap between supply and demand for hard disk drives in the December quarter as a result of the recent severe flooding in Thailand, which has hampered production of both drives and key components. The company sees industry-wide “unconstrained demand” for 180 million drives in the quarter, but says that shipments are likely to be in the 110-120 million range.
PC Forecast Cut in Wake of HDD shortage (CNET) – Barclays Capital has slashed its PC growth forecast for the fourth quarter due to the shortage of hard disk drives and continued weakness in the PC market, according to reports. The investment bank cut its global PC growth forecast for the fourth quarter to 4.3 percent from 7.2 percent “due to continued weak demand and a shortage of hard drive disks (HDD) resulting from the flooding in Thailand,” according to a number of Asia-based outlets such as the China Post, citing a Barclay’s research note.
Thai flooding impact on tech companies, suppliers – Business Week has a list of technology companies that have announced business impacts from the flooding in Thailand.