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The latest word on the HDD situation post Thailand's devestating floods last year is a somewhat frustrating one with a report indicating that while the global production capacity of hard drives will increase to 140-145 million units before the end of this quarter (which equates to 80% of the level production was at prior to the floods), inventories of products and components were said to have been exhausted through December 2011 and heading into January 12 as they were mostly snapped up by PC and notebook manufacturers.
Quotes have not yet been hiked due to the off-season which has followed, but they are expected to increase by a further 30 to 40% over the next 10 months or so on top of the already significantly inflated pricing we've seen since the floods destroyed much of Western Digital's and Toshiba's manufacturing facilities in particular. Note, the source has a discrepancy in that it says the 30 to 40% hikes are based off the prices of HDDs prior to the floods. This obviously can't be as to date we've already witnessed inflated pricing that has tipped 100% or even more.
These 30-40% price hikes talked about by the source don't make a lot of sense however, and a bit of a fishy smell is starting to woft in the air around us. If 80% of the global supply will be back by the end of this quarter as predicted and 100% in the third quarter, shortages can no longer be an excuse for the continually climbing, ridiculous prices we're seeing on HDDs right across the retail market.
Okay, so there is talk of increased prices with regard to raw materials, components and labour costs, but it's hard to justify that alone as being the reason why prices would continue to climb by such an absurd amount in such a short time frame while production is getting right back on track.
Source: Digitimes
KitGuru says: Excuses excuses – some real exposure needs to be brought on this situation in that there's a darker, greedier side after the events that unfolded following last year's floods.
The argument makes no sense. Maybe it was translated or the “Industry Insider’s” native language wasn’t english and he meant to say prices will go DOWN rather than up. That, would make a lot more sense. Otherwise, I see Samsung/Seagate & co. (the companies less reliant on Thailand HDD Manufacturing, so they got hit less) selling Drives for pennies compared to what Western Digital/Toshiba would be pricing them at.
Unless of course they’re doing price fixing, which I seriously doubt they’d even consider doing. But who knows. If they have indeed recovered 80% however, prices should be going back to pre-flood levels slowly, not going up. No excuses there.
Seen this reported elsewhere as 30-40% above pre-flood prices. The market is recovering. It’s a good thing!
Stephen Dougherty Implies that the whole situation doesn’t make sense. He clearly states (“These 30-40% price hikes talked about by the source don’t make a lot of sense…”) That the pricing is sure to still rise, in line with the document’s title. 🙂
I do agree with both Stephen and yourself, “Implied”. There don’t seem to be excuses for the rising prices.
The auther has misinterpreted the information from the source. It says that the prices will go down to 40% more than the pre-flood prices was, during 2012. As it is now, the HDD pricing is hovering north of 100% more than pre-flood prices. So a reduction of around 30% from the current pricelevel durnig 2012 is likely.
As I recall, you could get a 1TB for 80$ Pre-Flooding. Now Western Digital Caviar Black is 200$ 1TB, and 250$ 2TB. If they’re back to producing 80% of the drives they were producing Pre-Floods, then the prices should already be dropping down to about $150/200 soon, inflation being “justified” due to the continuous lack of full recovery.
By the end of 2012, the price should have easily long dropped back to $80-100, assuming they’re going back to pre-flooding prices. Assuming for no actual reason at all they really do inflate the Pre-Flood prices by 30-40%, then in that case they’re just leeching off a situation which no longer exists to make extra profits. Wonder how long they’d be able to keep that up for.
Either way I can’t really see that being maintained. Again however, curious to see how those less affected by the Floods will price, i.e. Samsung/Seagate & co. compared to Western Digital and Toshiba which were completely train wrecked by the Floods. Lower pricing by less affected could give them an edge in the market compared to their competition.
Poor article. Lacking comprehension of background facts. Numeracy-challenged. Lousy spelling. Clumsy writing style. In short, why bother? Get on the case, managing editor.