Hard drive prices

[SonicIce]

What is the deal? Since the flooding in Thailand in the past few weeks hard drive prices doubled or more. Are they expected to drop any time soon?

 

[DominionSeraph]

No clue.

 

[BoomerD]

Don't hold your breath. Like with gasoline prices, the increase is usually almost instantaneous, but the drop back to "normal prices" takes forever.

 

[Modelworks]

Not likely anytime soon. Factories were flooded and when you get a plant like a chip fab flooded you have to get it back to clean room status which takes months.

 

[ElFenix]

http://www.forbes.com/sites/carljohnson/2011/10/28/inside-wds-flooded-thai-factory/
maybe a year for WD to get back to where they were

pics:
http://www.channelregister.co.uk/2011/10/27/wd_flooded_factory/

 

[chusteczka]

Hindsight says it was foolhardy building industrial plant on a floodplain with inadequate flood protection.

The whole supply chain is located in that same floodplain. This "hindsight" is an obvious consideration when determining where to build a building or purchase a home. Regional flooding is a historically repetitive process. Every company that decided to build and invest their assets in this region were far more idiotic than just foolish.

I am shocked that both Seagate and Western Digital built in the same floodplain. That is a lost advantage for them both.

I am also surprised to see their stock prices have not tanked. I expected their Book Value to drop by half. Maybe this will happen after the next annual report. In the meantime, OCZ stock has nearly doubled in price due to their SSD product line.

 

[Spikesoldier]

$49.99 for a 1TB is over.

once prices settle after the flooding, they will be higher than the previous mark to correct for inflation, which IMO was long overdue.

 

[BoomerD]

IIRC, the same thing happened about 10 years ago when many of the chip plants in Taiwan were flooded in a typhoon. Cheap RAM disappeared almost instantly...and prices stayed high for more than a year.

 

[AnitaPeterson]

This is an overview of the situation, as seen by The Register... It's not pretty: http://search.theregister.co.uk/?q=thailand

Additional stories at MaximumPC:
http://www.maximumpc.com/search/thailand


Sad state of affairs...

 

[Puppies04]

What is the deal? Since the flooding in Thailand in the past few weeks hard drive prices doubled or more.

I think you kind of answered your own question there

 

[DesiPower]

I am glad that I stocked up on 3 1TBs when the prices were under 50!! But its really sad that all manufacturers are located in the same area, i wish there were more distributed manufacturing facilities... I am sure the whole computer industry will hurt because of this. PC prices in general will go up and people will buy less and build less.

 

[mfenn]

I am also surprised to see their stock prices have not tanked. I expected their Book Value to drop by half.

People still need hard drives, and it's not like there is an alternative supplier out there who can keep up with demand. Not all of WD's and Seagate's manufacturing facilities are in Thailand, there is a significant capacity in Malaysia as well. I think the fact that ASPs have doubled handily makes up for the decrease in volume.

 

[ther00kie16]

Hard to say, SSDs gaining ground so hard drive manufacturers can't afford not to bring prices back down ASAP. 1/2 yr would be ideal situation but it would probably take a bit longer.

 

[DesiPower]

SSDs are still alteast 10 times more expensive... I don't think HDD have to worry about SSD prices anytime soon

 

[corkyg]

People still need hard drives, and it's not like there is an alternative supplier out there who can keep up with demand. Not all of WD's and Seagate's manufacturing facilities are in Thailand, there is a significant capacity in Malaysia as well. I think the fact that ASPs have doubled handily makes up for the decrease in volume.

The crux of the matter is that the Thai plants provided components needed and used by all the others.

 

[mfenn]

The crux of the matter is that the Thai plants provided components needed and used by all the others.

"In the first half of 2011, Thailand accounted for 40 to 45 percent of worldwide HDD production."

http://www.eweek.com/c/a/Data-Stora...Shipments-Impacted-by-Thai-Floods-IDC-628867/

Yes, the loss of Thailand plants is significant, but it is not like 90% of the worlds HDD production is gone. Seagate and WD will do just fine because the ASP is being pushed up so dramatically. The people downstream (pun intended) in the supply chain will feel the pinch, but the HDD manufacturers themselves are not hurting for revenue.

 

[ther00kie16]

SSDs are still alteast 10 times more expensive... I don't think HDD have to worry about SSD prices anytime soon

1tb is $100 and 2tb is $200 for 7200rpm. SSDs are down to around $1/gb with some deals even cheaper. If hard drive prices don't stabilize within a year, SSDs may only be 3-5x the price.

 

[DesiPower]

1 TB of something usable like caviar blue is $150 and decent SSD is like $2 a GB. I do agree that in a year it might 5x the price but still I do not see myself paying $1000 for a 2TB drive anytime soon, $200? I can do.

 

[ElFenix]

"In the first half of 2011, Thailand accounted for 40 to 45 percent of worldwide HDD production."

http://www.eweek.com/c/a/Data-Stora...Shipments-Impacted-by-Thai-Floods-IDC-628867/

Yes, the loss of Thailand plants is significant, but it is not like 90% of the worlds HDD production is gone. Seagate and WD will do just fine because the ASP is being pushed up so dramatically. The people downstream (pun intended) in the supply chain will feel the pinch, but the HDD manufacturers themselves are not hurting for revenue.

i have to imagine that big OEMs are on long term contracts that set the price for these. though the force majeure clause may have been invoked.

should have bought a couple more of the 2GB hitachis from microcenter for $60. ah well.

 

[imagoon]

People still need hard drives, and it's not like there is an alternative supplier out there who can keep up with demand. Not all of WD's and Seagate's manufacturing facilities are in Thailand, there is a significant capacity in Malaysia as well. I think the fact that ASPs have doubled handily makes up for the decrease in volume.

That and they are likely pretty well insured... so the lost BV on gear will be converted to cash / new gear that will not require depreciation / expense on the books.