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Hard Drive Prices to Remain Inflated Throughout 2012

By - Source: IHS | B 66 comments

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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Top Comments
  • 27 Hide
    dark_knight33 , February 12, 2012 7:17 AM
    Great... Title should read: "Seagate continues price gouging thru 2012"
  • 25 Hide
    NuclearShadow , February 12, 2012 9:56 AM
    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.
  • 23 Hide
    A Bad Day , February 12, 2012 12:37 PM
    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."
Other Comments
  • 27 Hide
    dark_knight33 , February 12, 2012 7:17 AM
    Great... Title should read: "Seagate continues price gouging thru 2012"
  • 21 Hide
    Shape , February 12, 2012 7:22 AM
    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 Hide
    Gamer-girl , February 12, 2012 7:24 AM
    Quote:
    Shipments will by 13 percent in Q1 and 5 percent in Q2 on an annual basis, IHS believes.


    ???
  • 17 Hide
    de5_Roy , February 12, 2012 7:32 AM
    !@#$
    looks like retailers will milk this unfortunate situation longer.
  • 14 Hide
    joytech22 , February 12, 2012 8:04 AM
    Prices jumped by 20%?
    Well not when the flood prices hit at first, a 2TB drive instantly went up by like 100%+

    Now I can find 2TB HDD's for $130 which is a lot better than $200.
    Which reminds me I'm out of drive bays.. DAMN IT!

    Looks like I'll be investing in NAS or upgrading my mix of 1-2TB drives all to 4TB.
  • 9 Hide
    builder4 , February 12, 2012 8:31 AM
    Quote:
    “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,”


    Don't forget price fixing.
  • 0 Hide
    molo9000 , February 12, 2012 8:44 AM
    de5_roy!@#$looks like retailers will milk this unfortunate situation longer.


    Retailers don't have the power to influence the prices. If they price their merchandise too high, customers are going to buy somewhere else.

    If anyone has the power to influence prices, it's the manufacturers themselves, but even they are in fierce competition.
  • 8 Hide
    jdw_swb , February 12, 2012 8:56 AM
    It looks like Thailand is preparing for more flooding this June/July..........in all the same areas. Could disrupt HDD production for the whole year...and beyond.
  • 11 Hide
    tmk221 , February 12, 2012 9:05 AM
    here in Poland I need to pay PLN450 for 1TB instead of PLN170 a year ago.... that's 160% more!!!!!!!!!!. That's f-in insane...
  • 12 Hide
    duxducis , February 12, 2012 9:08 AM
    My Samsung is made in Korea but still sell's for double the price today
    so WD Seagate Samsung Hitachi all raised there prices to match
  • -3 Hide
    spp85 , February 12, 2012 9:25 AM
    Seagate just wanted to continue this "flooding impacts production" excuse and price the HDD as high as possible. They tripled their profits after this flooding issues happened. Most probably they may overtake Microsoft after 2012................
  • 1 Hide
    Anonymous , February 12, 2012 9:39 AM
    The number of units officially manufactured/shipped by manufacturers is more or less the same as it was last year. But thanks to the price increase fraud they have been allowed to do with no control.. FBI doesn't do a damn thing against true frauds nowadays with Obama it seems, they are too busy shutting down "pirates" websites.
    No with more floods coming in Thailand hard disk manufacturers managers will keep their fraud-the-whole-world plan going strong with no fear of getting jailed as it should happen.
  • 25 Hide
    NuclearShadow , February 12, 2012 9:56 AM
    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.
  • 9 Hide
    olaf , February 12, 2012 9:56 AM
    20% my white a.. its more like 100% or even 200% in some cases here... guess i wont be upgrading my hdd's this year not unless the EU steps in, and that is unlikely. Unfortunatly i think this will impact SSD's aswell in the long run. This whole flood is just an excuse to raise profit margins in an otherwise extremely competitive market.
  • 7 Hide
    izmanq , February 12, 2012 10:24 AM
    who is this fang zhang :| why should we believe him :| let's not buy new hard drive, til they dropped the price
  • -6 Hide
    CaedenV , February 12, 2012 11:35 AM
    meanwhile Microcenter is having a HUGE sale on SSD's.... So Tempting... Self control failing...
  • 7 Hide
    sublime2k , February 12, 2012 11:36 AM
    Jump from $72 to $182+ is more than 28%, I'd say.
    (Example for SpinPoint F3 1TB in my country.)
  • 7 Hide
    drwho1 , February 12, 2012 11:41 AM
    Hard drives will remain on shelves until price gouging stop.
    At least from my perspective it will.
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