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Global HDD Supply 70 Million Units Short in Q4 2011

Following a similar price hike initiated by Acer, PC manufacturers Asus and Dell are expected to increase the prices of notebooks slated to arrive in December by 2 to 3-percent thanks to the current shortage of hard drives. In 4Q11 alone, the global supply is expected to be 35-percent short of the overall demand for 180 million units, leaving only around 110 to 130 million units available worldwide.

Retail channels in Taiwan have already seen a 20 to 30-percent HDD price hike since the flooding shortages began back in October, and will reportedly see another 10-percent price increase in December. Vendors like HP, Acer, Asus and Dell will get first priority, leaving the secondary retail buyers fighting for what's left -- some of which are already hoarding hard drives in fear of a depleted global supply.

According to unnamed sources in Taiwan, several PC manufactures are actually optimistic about the hard drive supply in 1Q12, believing that the shortage will finally ease before the spring. Other manufacturers aren’t quite so positive, predicting that supply will begin to pick up in the second quarter of 2012. Either way, PC vendors will likely see increased hard drive costs throughout 2012, as the supply chain won't return to pre-Thailand flooding levels for another nine to twenty-four months.

Earlier this month Nidec, the Japan-based hard drive motor supplier which contributes to around 75-percent of the global HDD shipments, said that its Ayutthaya plants in Thailand had already resumed production. The company also announced that it was increasing production capacities in Philippine and China to help cover the impact from the floods. Nidec said it believed its efforts should help narrow down the HDD supply gap in 4Q11 despite the gloomy outlook.

But some companies and analysts are preparing for the worst. "We could run out of drives by the end of November," Piper Jaffray analyst Gus Richard said in an interview several weeks ago. "Availability is really going to tighten up. I'm seeing prices quoted anywhere from up 10 to up 60-percent. Nobody seems to be really paying attention. Everyone overreacted to the disaster in Japan. And now I think they're under-reacting."

Could the current hard drive shortage pave the way for solid state disks to take over as the primary storage medium? Unfortunately they cost more per gigabyte than mechanical drives despite offering better performance and reliability. But SSD retail prices are falling, and are expected to continue to drop once 3-bit flash arrives in 2012 and as the industry shifts over to 29 to 20-nm process technologies. Until then, mechanical hard drives will likely remain the primary storage device for some time to come.

  • danielravennest
    On an annual basis the world wants 720 million drives, so the shortage is less than 10% of a year's demand. So everyone delays their next disk purchase by a month, cleans up some unneeded files, and we are good.
    Reply
  • de5_Roy
    But some companies and analysts are preparing for the worst. "We could run out of drives by the end of November,"
    thailand's flood disaster is really a sad situation. but this looks like a ploy to exploit that situation using scare tactics and grim predictions to raise hdd prices during holiday seasons.
    Reply
  • cmcghee358
    You're thinking of it too narrowly. Where do 95% of hard drives go to? Not newegg. It goes to the OEM builders. Most PC consumers don't buy independent drives, the drives come with their new PC.
    Reply
  • cloja
    Here in Peru is really crazy: a Seagate Barracuda 7200.12 SATA III 1TB 6 Gb/s (ST31000524AS) was $72 before and now is $175.00 a 136% increase. =(
    Reply
  • alidan
    danielravennestOn an annual basis the world wants 720 million drives, so the shortage is less than 10% of a year's demand. So everyone delays their next disk purchase by a month, cleans up some unneeded files, and we are good.
    10% lower but 100-200% higher prices...
    Reply
  • We'll be peddling hard drives like they're illegal drugs.
    Reply
  • livebriand
    de5_roythailand's flood disaster is really a sad situation. but this looks like a ploy to exploit that situation using scare tactics and grim predictions to raise hdd prices during holiday seasons.*sigh* Why must they get the cheap hard drives compared to us? So what if they need it to keep the system prices low? They already bundle a bunch of bloatware, can't that help pay for it? If not, who'll notice a moderate increase in prices of those systems?
    Reply
  • ltdementhial
    clojaHere in Peru is really crazy: a Seagate Barracuda 7200.12 SATA III 1TB 6 Gb/s (ST31000524AS) was $72 before and now is $175.00 a 136% increase. =(
    here in mexico is worst they where in 67-70 dollars and now they are in 200 bucks...or 250 for 1.5tb...but an external USB 2.0 1.5tb is 112 greens...i bought 1 removed the HDD put an old 250 inside and gifted to my girlfriend xD
    Reply
  • iamtheking123
    danielravennestOn an annual basis the world wants 720 million drives, so the shortage is less than 10% of a year's demand. So everyone delays their next disk purchase by a month, cleans up some unneeded files, and we are good.Your math is wrong. They were short 35% for just this quarter. They weren't short in the previous quarters this year because the factories were full steam (why you get 10% short). If we're short 35% another 3 quarters (which we will be according to estimates of when production will resume) then it means we'll be short 35% of a year's demand (4 quarters).

    35% short isn't enough to justify the massive price increases though. The price increase is a result of the shortage in production being exacerbated by vendors hoarding supplies using their OEM status to muscle out newegg shoppers.

    But still I'm wondering who the hell buys 700 million hard drives a year. I've bought 2 internal drives in the last 3 years.
    Reply
  • _Cubase_
    ltdementhialhere in mexico is worst they where in 67-70 dollars and now they are in 200 bucks...or 250 for 1.5tb...but an external USB 2.0 1.5tb is 112 greens...i bought 1 removed the HDD put an old 250 inside and gifted to my girlfriend xD
    Here in America we don't tolerate that kind of crap... sir!
    Reply