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NEWS: Hard drive shortage expected to hurt consumers most

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(@douglasbrush)
Posts: 812
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Um…so this is bad. All my local supplies are wiped out. NewEgg is only allowing single unit orders on some models.

http//www.computerworld.com/s/article/9221409/Hard_drive_shortage_expected_to_hurt_consumers_most
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Computerworld - Flooding in Thailand is wreaking havoc on hard disk drive (HDD) manufacturers.

While vendors are expected to keep their most valuable customers - computer system manufacturers – supplied with inventory, the consumer retail market will likely be hit hard by shortages and price increases, analysts say.

Two industry research firms, IHS iSuppli and IDC, have predicted that the overall market shortage due to factory flooding in Thailand will reach 25% to 28% over the next six months.

The largest producer of hard drives, Western Digital is expected to be hit the hardest as IDC predicts that up to 75% of its production will be temporarily shut down, IDC said today.

IHS iSuppli said fourth quarter hard drive shipments will decline by 27.7% to 125 million units, from 173 million shipped in the third quarter.

Users should expect to see price increases of some 10% over the third quarter.

"You'll start to see PC makers increase prices for some products. So indirectly, consumers will face some higher prices because of higher HDD prices," said John Rydning, a vice president of research at IDC.

Rydning said he also expects that higher prices for USB-attached HDD products.

While it's hard to predict how specific disk drive vendors will allocate affected supplies to computer system customers, manufacturers generally are likely to make certain enterprise system makers are taken care of first, Rydning said.

Computer system manufacturers will also be high on the list, while consumer buying disk drives at retail stores will be at the bottom, Rydning said.

Already, prices on retail sites such as Pricegrabber.com and Newegg.com have begun skyrocketing.

For example, the average price of Western Digital's 1.5TB Caviar Green series' internal drive on Pricegrabber has shot up from $162 to $280 over the past five days. The average price of a Toshiba's 1TB Canvio Basics external drive has gone from $109 to about $115 in the same period.

Disk drive makers and their system customers are being hit due to shortages of mechanical and electrical components. The most critical loss for many manufacturers are a key component for read/write heads.

Ironically, one of the major components of read/write heads– read/write head wafers – are produced in Ireland, the U.S. and Japan. Another critical component, the slider, though, is produced in Thailand.

The slider is the block on the tip of a read/write head on which the record and playback head (wafer) is mounted. "For Western Digital, we believe that will be the component most critically short in 2012," Rydning said.

Current HDD inventories will be depleted this quarter, which will offset some HDD production shortfall, IDC said.

"We generally believe the HDD industry will find way to return to pre-flood production levels by March, but by that point HDD supplies will be at extremely low levels," Rydning said. "It's still going to be a pretty painful period from December through February for most HDD customers."

Toshiba and Western Digital have announced a temporary shutdown of Thailand factories.

Toshiba has reported water is 2 meters deep in its storage device plant and 3 meters deep in its semiconductor factory in Thailand.

IHS iSuppli said the flooding could potentially affect notebook production in early 2012.

David Chang, CFO for PC-maker Asus, warned this week that the company will run out hard disk drives by the end of November.

 
Posted : 03/11/2011 1:40 am
(@kovar)
Posts: 805
Prominent Member
 

Greetings,

Yep, it will be a problem. I have a cache of clean drives that'll keep me going for awhile, depending on business tempo.

-David

 
Posted : 03/11/2011 3:07 am
(@jonathan)
Posts: 878
Prominent Member
 

It could be worse; you could have had your home swept away. Relatively easy for us to deal with the consequences of the floods, either by passing on the increase in costs to the client, recycling what you have or letting the client know there just aren't any more HDDs to be currently had.

 
Posted : 03/11/2011 1:39 pm
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