Seagate: HDD Production Won't Return to Normal For 1 Year
Hard drive production may be back to pre-flood levels by the end of 2012, claims Seagate's CEO.
Wednesday Seagate Chief Executive Officer Stephen J. Luczo said that Wall Street analysts are talking nonsense when they say that hard drive production will be back to pre-flood levels by next summer. In fact, he's predicting a difficult road ahead for the industry given that many of Seagate's own 130 or so suppliers are still under three feet of water.
"This is going to take a lot longer than people are assuming, until the end of 2012 at least," he admitted. "And by then, demand will have gone up."
The flooding in Thailand is currently affecting an infrastructure that produces around 40-percent of the world's hard drives sold by Seagate, Western Digital and Toshiba, thus pushing average hard drive prices up by 20-percent. That said, industry production this quarter is expected to be 50 million drives shy of the 180 million target.
"It’s going to be very interesting to see who gets drives and who doesn’t," Luczo said, adding that customers are suddenly eager to stockpile some of Seagate's load of drives already manufactured even though they sport higher prices.
"Some have offered $250 million upfront," he told Bloomberg.
But there may be a positive side to the story... at least for hard drive manufacturers. Luczo indicated that the flood has seemingly made the industry a bit more appreciative of hard drive manufacturers. The floods have even given Luczo more leverage on prices, but he's willing to settle on a 20-percent hike for those who commit to one- to three-year contracts rather than raise prices 40-percent across the board.
"People are going to appreciate the complexity of this business," he said.

Case in point, Gas prices in the south east.
The day before Katrina hit, the gas prices there where around 1.00 - 1.60 cheaper than in California (My folks live in Georgia so I get the info)
They where consistently this way for about 12 years, then after Katrina hit and the out right thievery stopped, the leveled off at around the same national average.
The Oil companies blamed the problems at the refineries, however those things where fixed within just a few months.. yet the prices never went back to the way they where...
Interesting huh? Hope we don't see the same thing here.. could be a way to increase margins..
These assholes probably caused this crisis to recoup their losses. Are there any pictures or proof that they're under three feet of water? I wonder...
Case in point, Gas prices in the south east.
The day before Katrina hit, the gas prices there where around 1.00 - 1.60 cheaper than in California (My folks live in Georgia so I get the info)
They where consistently this way for about 12 years, then after Katrina hit and the out right thievery stopped, the leveled off at around the same national average.
The Oil companies blamed the problems at the refineries, however those things where fixed within just a few months.. yet the prices never went back to the way they where...
Interesting huh? Hope we don't see the same thing here.. could be a way to increase margins..
Fortunately electronic industry is the exception where price going down is the rule.
Perhaps. But the damage that the smaller businesses with needs for large storage will take is too much. Some of them can barely include a 1TB (OLD price) in their budget, forget SSDs and new prices... Seagate and others WILL lower their prices or the demand will fall beyond what they can earn by increasing the price.
And the next thing you know, flash chip factory will be rocked by a hurricane!
Some parts like platters and controllers are made by very small number of factories.
This will keep me from Hoarding. I feel this will be good for me.
When DVD-R and Blueray disks go up then I will agree we are being hooped.
20% I could live with. All HDD's available to me have seen a 230% markup on prices from last month and are steadily increasing each week.