The Hard Drive Shortage & A Very Useful Price Tracker

Beginning in late July of this year, Thailand experienced its worst monsoon-related flooding in more than half a century killing over 600 people, covering about six million hectares of land and costing an estimated 5.1 billion USD in damage. Among the businesses hardest hit were hard drive manufacturers including Western Digital, Hitachi and Toshiba as well as many smaller companies who produce parts for hard drives.

Initial reports projected a return to pre-flood manufacturing levels by as early as December of 2011. We're now seeing talk of a possible shortage of supply continuing well into 2013. The most vocal industry spokesman has been Seagate Chief Executive Officer Steve Luczo who has warned that estimates for a quick recovery are unrealistic.

Here's an update on the flood impact from November 23rd from online retailer Other World Computing:

Even once the waters recede, drive industry experts are saying it could take a year for these component manufacturers to replace their machinery, and many may have to relocate as well. Some companies, like Nidec, aren’t waiting for the waters to recede and have sent divers in to unbolt and retrieve equipment. Others, like suspension arm maker Hutchinson Technology, still has $50 million worth of specialty manufacturing equipment bolted to their now-submerged factory floor.

While many analysts have stated that production should be back to normal by the end of Summer 2012, others are now projecting shortages until the end of 2012 at the very least, primarily because many of the components are surprisingly single source supplied.

What does this mean to the potential computer or hard drive buyer? We've already seen price increases for hard drives but it's difficult and potentially misleading to offer an across-the-board average since some e-tailors and retailers appear to be taking advantage of the situation and raising prices ahead of actual shortages. And some are charging a premium on stock that they acquired at pre-flood prices.

camelegg Price Tracker
If you are in the market for a hard drive (or just curious), I'd recommend signing up for camelegg Newegg's Price Tracker app. Its free and let's you track prices, view price history on a specific drive as well as receive email alerts when something on your watch list dips below a price you set. camelegg also works on other sites including Amazon and Best Buy and its not limited to just hard drive prices.

On the good news front, Western Digital announced today that it has (re)started production in its Bang Pa-in plant.

COMMENTS
deckeda's picture

... had the last good prices we'll likely see for some time. I don't know about anyone else, but Cyber Monday (or, as Amazon has clumsily dubbed the last week, "Cyber Monday Deals Week") didn't reveal any nuggets either. I do think it's going to get worse before it gets better. Apple was in the news yesterday for feeling the pinch for 2TB drives.

Went to MicroCenter to pick up a replacement 250GB (internal) laptop drive. Picked up a Seagate for $89, high for even a 2.5". Signs everywhere begging customers to not buy more than 2 of any kind. I overheard one sales associate say they weren't scheduled to get any more drives of any kind.

I'd read the floods caused Western Digital to lose its top market share status --- that would spark me to consider moving the hell outta Dodge to better digs.

Michael Lavorgna's picture

In their earnings call on Monday and added:

We think Thailand flooding problems on hard-drive availability starts to be alleviated after the first half of the year.

Here's some news from Computerworld:

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

And...

Consumers should expect fourth-quarter prices to be at least 30% higher than third-quarter prices.

usernaim's picture

25% shortfall doesn't correlate to 30% higher prices.  Much smaller imbalances cause much greater changes in price.

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