Hard disk drive supply shortages in the wake of Thailand flooding will continue to affect consumers, computer system manufacturers and corporate IT shops into 2013, according to market research firm IDC.
“I think the most painful period will occur now through February of next year. We expect the situation will improve, but it won’t feel as if things are back to normal until 2013,” said John Rydning, an IDC analyst who follows the hard disk drive market.
Rydning said, “supplies will increase to the point where it will be possible to meet immediate demand in the second half of next year, but distribution channels, online retail sites and system manufacturers will continue to feel the affects into the following year.”
This week, Lenovo sent an email to its corporate IT customers telling them it is out of a number of hard disk drives, including the highly popular 7,200-rpm models.
A Lenovo representative said that customers who normally purchase systems with 160GB 7,200-rpm drives, or various other drives that are unavailable, will have to settle for “off-spec” drives.
The Lenovo representative said the hard drive supply chain remains fluid and is monitored daily by the company’s executives.
“Akin to the hysteria when banks defaulted in the 1930[s], PC orders across the industry are being placed for which HD supply does not exist,” the rep said. “The Lenovo Global Supply Chain (GSC) Team is providing updates throughout each day. In this regard, we will all have to be flexible and adjust expectations. Simply put, the configuration to which you have been accustomed, unfortunately may now be in default, and we’ll have to adjust our configuration and build a system that has an available hard drive.”
Lenovo said it will swap unavailable drives for another product the industry can still provide, such as a 5,400-rpm model. Even then, customers will have to wait an additional 45 to 60 days for those drives to become available, according to the representative.
According to Lenovo, the drives that are unavailable for some ThinkPad laptops include 750GB 5,200-rpm models and those with configurations of 320GB 5,400-rpm, 250GB 7,200-rpm and 160GB 7,200-rpm.
Lenovo did not respond to a request for comment by deadline.
“I think, in part, what you’re seeing from Lenovo is an indication of what we can expect for the next six months. There will be drives available but not the ones you want,” Rydning said.
Western Digital, the largest producer of hard drives, was hit the hardest by the Thailand flooding. IDC predicts that up to 75% of its production will be temporarily shut down.
Four industrial parks were hit the hardest by the flooding, which began in the northern part of Thailand and worked its way south. Farthest north is the Rojana Industrial Park, which has since been drained of floodwaters and is coming back online. Hitech, which makes drive components, has also been drained. Bangpa-in, Western Digital’s largest hard drive production facility, was partially affected. And Navanakorn, where both Western Digital and Toshiba perform hard drive assembly, is still being affected by the floodwaters.
“While it’s difficult to predict how specific disk drive vendors will allocate supplies to computer system customers, manufacturers generally are likely to ensure that makers of enterprise systems are taken care of first,” Rydning said.
“Computer system manufacturers will also be high on the list, while consumers who buy disk drives at retail stores will be at the bottom,” Rydning added.
In late November, hard-drive maker Seagate Technology said that the Thailand floods would cause hard disk drive supplies to be significantly constrained for several quarters. For the quarter ending in December, the company said the industry will ship between 110 million and 120 million units.
According to IDC, this quarter’s hard drive shipments will fall about 30% below demand. “We think the industry will ship about 120 million units, and demand was 175 million units, so you get the idea of the impact from the floods,” Rydning said.
Market research firm IHS iSuppli said the drive shortage will cause PC shipments in the first quarter of 2012 to be about 3.8 million units lower than iSuppli had forecast in August.
“This will contribute to a reduced forecast for the whole of next year, with global PC shipments now expected to expand by only 6.8% in 2012, down from the previous outlook of 9.5% growth,” iSuppli said..
iSuppli predicts that worldwide PC shipments in the first quarter of 2012 will amount to 84.2 million units; it had earlier pegged the number of first-quarter shipments at 88 million units.
PC maker Dell said the complexity of the problem makes it difficult for the industry to pinpoint the magnitude or duration of hard drive shortages.
“Over the past two months, Dell has made strategic purchases of inventory and pulled in supply. The direct model has advantages in this environment,” a spokesman said. “We have teams working with impacted suppliers to manage our HDD supply chain and qualify new sources of supply. Our goal is to mitigate any impact to our customers and Dell.”
Because of the shortages, hard drive prices have skyrocketed over the past month, in some cases as much as 100%.
Despite concerns about rising HDD costs, there are indications that prices are starting to settle down.
According to Infoworld, HDD price tracking site the Camelegg chart, which tracks prices at Newegg, showed the Western Digital 2TB Caviar Green Western Digital20EARS hit a low of $69.99 just before the flood. A month later, on Nov. 10, it had soared to $249.99 — an increase of 250%. Today the drive sells at Newegg for $162.99.
However, not all prices are on the downswing. For example, on PriceGrabber.com, the price of a Seagate Barracuda 1TB 7,200-rpm drive has climbed steadily from an average $140 in late Ocober to $192 today.
