Hard Drive Prices to Remain Inflated Throughout 2012

In Q4 2011, HDD shipments dropped by 26 percent over the same period in the previous year. Shipments will by 13 percent in Q1 and 5 percent in Q2 on an annual basis, IHS believes. In Q3, the market will stabilize and grow by 2 percent and bounce back with 49 percent in the fourth quarter of this year. Sequentially, HDD shipments are predicted to climb 14 percent in Q1, 11 percent in Q3 and 4 percent in Q4.

“The recovery of global HDD manufacturing has begun and will continue during each quarter of 2012,” noted Fang Zhang, storage analyst for IHS. “However, the recovery will be prolonged for at least two more quarters, as supply constraints keep unit shipments from climbing on an annual basis until third quarter." The shortage will translate to continued inflated prices throughout 2012, the firm said.

HDD makers and component suppliers have resumed only partial production in Thailand and have shifted some of their manufacturing to other countries to alleviate the impact of the supply shortage.  According to IHS, Western Digital has been the HDD manufacturer most impacted by the floods and is not expected to return to full production until September.

IHS said that the Thailand flood has caused the global average selling price (ASP) for HDDs to jump by 28 percent in Q4 2011. Prices are forecast to decline by 3 percent in Q1 and by 9 percent in Q2. “Prices will remain high for a number of reasons, including the higher costs associated with the relocation of production, as well as higher component costs because of flooding impacts among component makers,” Zhang said. “Furthermore, PC brands have signed annual contacts with HDD makers that have locked them into elevated pricing deals for the rest of the year.”

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  • dark_knight33
    Great... Title should read: "Seagate continues price gouging thru 2012"
    27
  • NuclearShadow
    I simply refuse to buy at such prices even though I can afford it I simply do not see the hard-drives being of such value. As long as I am not in a absolute requirement to make the purchase I will hold off buying a new hard-drive.
    25
  • A Bad Day
    caparcHow could this happen? If you're going to invest $100s of millions or billions in buildings and equipment that's hard to move you do a really REALLY careful site evaluation that considers hundreds of factors. One of them is flood risk, which should be one of the easy ones. No doubt all these facilities carried insurance. The insurance company is typically a partner in risk evaluation. What am I missing here? I suppose I could be asking the same questions about those Japanese nuclear plants.


    "Is the labor cheap?"

    "Check."

    "Are business regulations at minimum?"

    "Check."

    "Are the taxes low?"

    "Check."

    "Is the flood control sufficient since we're building in a flood-prone area?"

    "Well, not really, but our workers can put up sandbag barriers, so check."
    23
  • Other Comments
  • dark_knight33
    Great... Title should read: "Seagate continues price gouging thru 2012"
    27
  • Shape
    Noooo!!! I was hoping prices would drop significantly this year. Ohhhh well, I guess I'll have to ration this 1GB of space remaining.
    21
  • Gamer-girl
    Quote:
    Shipments will by 13 percent in Q1 and 5 percent in Q2 on an annual basis, IHS believes.


    ???
    21