Future HDD Shortages Causing Serious Price Increases
Supply versus Demand. It’s easy to understand why providers of Hard Disk Drives (HDDs) are raising their prices. There might not be a shortage of supply right now but the anticipation of a shortage is already driving prices up. The flooding in Thailand has affected many manufacturers of these drives such as Western Digital, Toshiba, Seagate, etc. Western Digital (WD) seems to be the hardest hit with about 60% of their hard drives coming from their Thailand operations. The company shipped 54 million hard drives for the quarter ending July 1, 2011. That would mean a shortage of approximately 32 million hard drives per quarter for WD. That is an astounding number and would lead to a definite drop in revenue for the company. The New York Times published a story on this topic with some insight from Gartner’s John Monroe. He expects that it will take a full year for hard drive production to resume it’s usual level.
One online provider, Newegg.com, has been preparing for the shortage by raising prices. One example:
This is just one example of a hard drive price increase recently. However, it is great that Newegg.com allows you to price track their products. If you have been considering purchasing a HDD and are worried about the price increase, go to camelegg.com. Search for a product and see what the price has been doing. You can even set it to alert you when the price drops where you want it. Pretty neat.
How will this affect the rest of us? Data centers focused on storage, like Amazon for example, will probably be paying more for HDDs. PC and server manufacturers will likely be hit as well. Time will tell how far reaching this shortage will be. Western Digital will be hit pretty hard, while Seagate, who wasn’t affected as much, will probably gain from the raising prices.
Relevant blogs and articles:
The 2011 Monsoon Season in Thailand has affected more than 3 million people, leaving 506 dead. We are keeping those affected in our thoughts during this tragedy.