Impact of hard drive shortage to linger through 2013

Hard disk drive supply shortages in the wake of Thailand flooding will continue to affect consumers, computer system manufacturers and corporate IT shops into 2013, according to market research firm IDC.

“I think the most painful period will occur now through February of next year. We expect the situation will improve, but it won’t feel as if things are back to normal until 2013,” said John Rydning, an IDC analyst who follows the hard disk drive market.

Rydning said supplies will increase to the point where it will be possible to meet “immediate demand” in the second half of next year, but distribution channels, online retail sites and system manufacturers will continue to feel the affects into the following year.

Hardest hit

Hard disk shortage to have minimal impact in GulfWestern Digital, the largest producer of hard drives, was hit the hardest by the Thailand flooding. IDC predicts that up to 75% of its production will be temporarily shut down.

Four industrial parks were hit the hardest by the flooding, which began in the northern part of Thailand and worked its way south. Farthest north is the Rojana Industrial Park, which has since been drained of floodwaters and is coming back online. Hitech, which makes drive components, has also been drained. Bangpa-in, Western Digital’s largest hard drive production facility, was partially affected. And Navanakorn, where both Western Digital and Toshiba perform hard drive assembly, is still being affected by the floodwaters.

In late November, hard-drive maker Seagate Technology stated that the Thailand floods would cause hard disk drive supplies to be significantly constrained for several quarters. For the quarter ending in December, the company said the industry will ship between 110 million and 120 million units.

According to IDC, this quarter’s hard drive shipments will fall about 30% below demand. “We think the industry will ship about 120 million units, and demand was 175 million units, so you get the idea of the impact from the floods,”        

HDD pricing

Because of the shortages, hard drive prices have skyrocketed over the past month, in some cases as much as 100%.

Despite concerns about rising HDD costs, there are indications that prices are starting to settle down.

According to Infoworld, HDD price tracking site the Camelegg chart, which tracks prices at Newegg, showed the Western Digital 2TB Caviar Green Western Digital20EARS hit a low of INR 3200.00  just before the flood. A month later, on Nov. 10, it had soared to INR 11500.00  an increase of 250%.

However, not all prices are on the downswing. For example, on PriceGrabber.com, the price of a Seagate Barracuda 1TB 7,200-rpm drive has climbed steadily from an average $140 in late Oct. to $192 today.

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