Seagate Believes HDD Supply Disruption to Continue in 2012
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.
That's interesting because the impact increased the average unit cost for the consumer by over double.
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.
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.
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
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.
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.
That's interesting because the impact increased the average unit cost for the consumer by over double.
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.
Affected
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.
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!)
I turn in the rebates and forget to follow up after they don't arrive. Stopped buying products with rebates because of it.
http://www.xbitlabs.com/news/storage/display/20120231212837_Seagate_s_Profitability_Skyrockets_Due_to_Constraints_in_Hard_Drives_Shipments.html