Sign in with
Sign up | Sign in

Seagate Believes HDD Supply Disruption to Continue in 2012

By - Source: Seagate PR | B 44 comments

Seagate estimates 2012 HDD shortage at 150 million units

While the company was able to ship 47 million drives in Q4, the company warned analysts that the damage will result in further shortages. In 2012, the industry will not be able to supply hard drives with a total capacity of about 100 exabytes, Seagate CEO Stephen Luczo said. Based on the average capacity of shipping hard drives today, that translates to about 150 million units, according to the company.

The company noted that seven of Seagate's top 10 suppliers "suffered direct factory damage" and all product platforms "experienced some form of supply interruption." Luczo stressed that "a large portion of the precision machining capability that support the hard drive industry  the motors and base decks to actuators and specialty mechanical parts, were catastrophically lost." Still, the production is ramping up again and "over 200 requalifications have occurred for motor base assemblies alone," the executive said. The impact increased the average unit cost for Seagate by $2.50.

At this time, Seagate is somewhat pessimistic that the HDD industry can catch up with demand anytime soon. "We believe the impacts of the flooding are going to be felt well into 2013 in terms of trying to address the needs of customers to acquire storage," Luczo said during the earnings call with analysts.

For Q4, Seagate reported revenues of $3.2 billion and a net income of $563 million.

Discuss
Display all 44 comments.
This thread is closed for comments
Top Comments
  • 18 Hide
    danraies , February 2, 2012 1:05 AM
    The articles that I've read on this make it seem like all the HDD manufacturers are setting themselves up to milk this whole situation for as long as they can. Not that this is a bad strategy, but it's bad news for those of us hoping to buy drives at pre-flood prices sometime soon.

    Quote:
    The impact increased the average unit cost for Seagate by $2.50.


    That's interesting because the impact increased the average unit cost for the consumer by over double.
  • 14 Hide
    spasmolytic46 , February 2, 2012 12:24 AM
    To bad this doesn't help lower SSD prices.
  • 11 Hide
    AznCracker , February 2, 2012 12:12 AM
    Supply and demand my friend. If they kept the hd prices low, they would have ran out of hard drives in a few weeks.
Other Comments
  • -2 Hide
    Youngmind , February 2, 2012 12:04 AM
    Wait, didn't SEAGATE have no shortage because the flood in Thailand did not affect them but they still price gouged their HDDs?
  • 11 Hide
    AznCracker , February 2, 2012 12:12 AM
    Supply and demand my friend. If they kept the hd prices low, they would have ran out of hard drives in a few weeks.
  • 10 Hide
    fordry06 , February 2, 2012 12:17 AM
    YoungmindWait, didn't SEAGATE have no shortage because the flood in Thailand did not affect them but they still price gouged their HDDs?


    lol, first off, just because seagate itselft wasn't directly impacted as much as other companies, its suppliers were, which means it has been affected severely as well. Hard to put together a hard drive when the warehouse is empty.....

    2nd, ever heard of supply and demand? supply fell way short of demand very suddenly so of course the price is going to go up, it isn't price gouging, its economics.
  • 7 Hide
    narlzac85 , February 2, 2012 12:22 AM
    And how long will they pretend that they are having a shortage (not saying they aren't right now) because they know that the internet cannot function without a constant supply of drives and they can basically charge whatever they want and people will keep buying them until one of the (few remaining) manufactures decides to undercut the rest? I understand that supply was hurt, but just how honest are they going to be about it when they have an easy chance to recover their loses.
  • 14 Hide
    spasmolytic46 , February 2, 2012 12:24 AM
    To bad this doesn't help lower SSD prices.
  • 7 Hide
    CaedenV , February 2, 2012 12:46 AM
    Considering that it is 2012, and there is still a shortage I would say that their prognostications are correct lol

    Can't wait for my 2TB drives to get back under $100 each... I'm really hurting for a home server, if only I didn't need 4 of the damn things to do it right.
  • 0 Hide
    alidan , February 2, 2012 12:48 AM
    YoungmindWait, didn't SEAGATE have no shortage because the flood in Thailand did not affect them but they still price gouged their HDDs?


    they increased it 10% due to them being the only real choice, they were effected though, just had most of their manufacture areas out of the flood
  • -1 Hide
    CaedenV , February 2, 2012 12:48 AM
    spasmolytic46To bad this doesn't help lower SSD prices.

    On the contrary, the prices may not have come down much, but the rebates have been killer the last few months. I have no doubt that they are trying to entice buyers with those... just hoping that they forget to turn in the rebates.
  • -1 Hide
    seab4ss , February 2, 2012 12:59 AM
    narlzac85And how long will they pretend that they are having a shortage (not saying they aren't right now) because they know that the internet cannot function without a constant supply of drives and they can basically charge whatever they want and people will keep buying them until one of the (few remaining) manufactures decides to undercut the rest? I understand that supply was hurt, but just how honest are they going to be about it when they have an easy chance to recover their loses.


    Capitalism and competition will sort this out. A few companies may try and colude to keep prices high but there will be other companies who will sell for the right market price to maximise output and turnover. Thats the beauty of a free market.
  • 18 Hide
    danraies , February 2, 2012 1:05 AM
    The articles that I've read on this make it seem like all the HDD manufacturers are setting themselves up to milk this whole situation for as long as they can. Not that this is a bad strategy, but it's bad news for those of us hoping to buy drives at pre-flood prices sometime soon.

    Quote:
    The impact increased the average unit cost for Seagate by $2.50.


    That's interesting because the impact increased the average unit cost for the consumer by over double.
  • -2 Hide
    tomfreak , February 2, 2012 1:10 AM
    ok Seagate or whatever I wait and look to buy harddrive again by 2013. Cya fools. it all seems that you are are taking ur sweet time to "rebuild" ur factory.

    isnt the high price of HDD also slow the demand? I am pretty a lot of people are like me stop buying until it fall back the previous price.
  • -1 Hide
    pjmelect , February 2, 2012 1:12 AM
    That's a very low profit margin for such a high turn over, is that right?
  • -8 Hide
    enzo matrix , February 2, 2012 1:14 AM
    alidanthey increased it 10% due to them being the only real choice, they were effected though, just had most of their manufacture areas out of the flood

    Affected
  • -1 Hide
    elbert , February 2, 2012 1:15 AM
    Guess ill finally buy an SSD and bluray burner. Start only using my old HD's for important stuff.
  • 1 Hide
    bigdragon , February 2, 2012 1:32 AM
    If hard drive prices stay high I won't be buying another hard drive. I can get by on several older drives working together. I am looking to go SSD for my new system too. It would be nice to have a large capacity drive as secondary storage, but I don't see it happening anytime soon with the way the manufacturers are milking the floods. They must have hired some BP or Exxon executives.
  • -1 Hide
    JDFan , February 2, 2012 1:54 AM
    Just glad I got my 1TB and 500GB drives just before the prices skyrocketed (paid $49 and $39) -- figure it'll probably take 6 months to a year to get the prices back down and then since they were able to milk it for so long there will be some other major catastrophe that shoots them up again -- Just like Oil prices every travel season.
  • 0 Hide
    gbwatson96 , February 2, 2012 2:12 AM
    Well, the hard drive prices had been coming down into reasonable price for the last couple of years at least. So, they did not make enough money and need to make up for lost time?

    Seagate hard drives are manufactured in China (no flood zone). To my best understanding, it was Western Digital that had production in Thailand.

    If they needed to up the price a bit, ok. I will pay extra for a good quality hard drive with no problem. But, 3x the price and less warranty (from what I hear)? I don't thinkso.
  • 6 Hide
    digitalrazoe , February 2, 2012 2:39 AM
    HOLD UP~! WAAAIT A MINUTE ~!!!
    What part of "The impact.." that caused an "...increased {of} the average unit cost for Seagate.." a freakin "..$2.50." equal a 150% increase in price on some drives on the street? Don't get me wrong I am sorry for the floods and wish the people that live there and work for a living speedy recovery. But when a Seagate CEO has the "Winchesters" to say per unit price is up by 2.50 and the street price is much much higher I begin to wonder what kind of fool they take us for ? Do I expect an increase in price due to natural disaster ? Yes I do... but the cost don't justify the means. (byte me!)
  • 0 Hide
    bak0n , February 2, 2012 3:18 AM
    CaedenVOn the contrary, the prices may not have come down much, but the rebates have been killer the last few months. I have no doubt that they are trying to entice buyers with those... just hoping that they forget to turn in the rebates.


    I turn in the rebates and forget to follow up after they don't arrive. Stopped buying products with rebates because of it.
  • 2 Hide
    tomfreak , February 2, 2012 3:24 AM
    Take a look at this then u know that u all are getting rip off. There is no such thing as selling lesser HDD while getting more profit than b4.

    http://www.xbitlabs.com/news/storage/display/20120231212837_Seagate_s_Profitability_Skyrockets_Due_to_Constraints_in_Hard_Drives_Shipments.html

Display more comments