Better stock up on those computers that you were going to buy anyway, because prices doesn’t seem like they will fall anytime soon. During the christmas season, there is a large demand for electronics and computers, so prices are likely to be higher during the fourth quarter. To compound this problem coinciding with the holidays, the Thailand flood has taken out a huge segment of hard disk drive production! Thailand accounts for up to 45 percent of worldwide hard-drive production and the flooding has damaged more than a dozen hard-disk-drive factories
In the Philippines, a 320 Gb hard disk sold for about 1,700 before the flood, and it is now selling at 3,900 pesos! A new 1TB hard disk now sells for 5,300 pesos. And to think I just bought a 1.5TB hard disk two weeks ago for 3,800 pesos (THIS price already represented some rise back then!). So, needless to say, all laptops, media players and desktop sales will be affected.
Look at the Graphs of Samsung and Western digital Hard Drive prices from September to now, a whopping 180% rise! Also note Extremetech’s analysis of prices below:
Thai floods have taken out Western Digital and Toshiba’s disk drive operations at Bangkok, with an industry shortfall this quarter of 50 million or more drives. It is not known how long it will take to get the plants and any affected component suppliers back to full operations. As the supply chain transit from Thailand to points of sale is a lengthy one in timescale terms the shortages are bound to persist into 2012 with, perhaps, the first quarter showing severe drive availability constraints and price rises and a gradual amelioration after that in the second and third quarters.
Somewhere in the world, retailers are forced to “Ration” hard drives and limit them to one or two per customers. See picture on left.
In the USA, the price effect on Newegg:
- 1TB SATA hard drives went from $50/TB to $140/TB, +180%, almost triple the price
- 1.5TB from $47/TB to $93/TB, +100%
- 2TB from $40/TB to $72/TB, +80%
- 3TB from $67/TB to $87/TB, +30%
In England, Digitimes reports that prices of 500GB drives have shot up from $45 to over $100, which has been blamed on retailers panic-buying units in two or three times the volume of their usual orders.
Technology site Bit-Tech reports that prices of hard drives in England are also going up, with 2TB drives increasing two-fold to around £140 and specifically the 1TB Samsung F3 drive – which used to retail for around £30 – is now selling for more than £80.
ExtremeTech.com has used price-tracking site Camelegg and discovered that the price of a Western Digital 2TB drive remained steady at around $150 from early May until October, with some small fluctuation; but from late October the price increased massively to almost $250.
While hard disk drives (HDDs) are seeing massive price rises because of the floods, sold state drives (SSDs) are not affected, with Bit-Tech predicted that the SSD industry will see a boost from consumers opting for the more expensive, but considerably faster, driver over traditional HDDs.
Because the hard disk supply chain is heavily represented in this region, many hard disk manufacturers with unaffected plants will still lose capacity.Noble Financial Equity Research made the following 4th quarter shipped volume estimates:
Noble Financial Equity Research made these other points:
- · Due to the effects of flooding, we do not expect the industry to return to normalcy for 3 to 4 quarters
- · We see only 120M drives shipped this quarter versus the TAM (total addressable market) of 175M to 180M units
- · Due to lack of channel and finished goods inventory, the supply shortfall in the March quarter is also expected to be sever despite higher expected drive shipments and component availability
- · By shifting production out of Asian plants, critical component supplier Nidec believes it can ramp to an output of 170 drive motors by the March quarter
- · We see significantly higher drive and component prices persisting into the summer months of 2012
- · Seagate will be the principal beneficiary of the supply shortage and higher pricing
- · We believe Hutchinson (drive suspension manufacturer) will be able to rapidly ramp its US assembly operations and higher suspension prices will offset the reduced business from Western Digital
CAMERA PRODUCTION ALSO AFFECTED
The camera manufacturers Canon, Sony, and Nikon have all suffered production disruptions. Sony has three fabs in Thailand. The disruption has caused Sony to delay product introductions of the cameras NEX-7 and the Reflex Alpha 65, and other components will be in short supply. Sony makes the CCD camera sensors and Digital Signal Processor (DSP) chips which are used to enhance the imagery. A product manager at the Sony fabs estimated that normal production would resume in 3-4 months, or around March 1, 2012.