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Hard drive prices slide as Thai flood aftermath subsides

Lucas Mearian | Dec. 21, 2011
Hard drive shortages peaked in October, pushing up prices by as much as 150%, but supplies and prices appear to be leveling off and may give online consumers much-needed relief in the weeks ahead.

The price of the most popular hard disk drives are beginning to drop as inventories climb out of a deep hole that began in October after massive flooding shut down major production sites in Thailand .

Drive maker Western Digital was hardest hit by the flooding, with research firm IDC predicting that up to 75% of the company's production lines were temporarily shut down.

According to new information from ecommerce tracking site Dynamite Data , the top 50 hard drives on sites such as Newegg.com and Tigerdirect.com , leaped in price by 50% to 150% after the flooding. The price jump was kicked off in October when drive inventory levels plummeted 90% in less than a week, according to Kristopher Kubicki, data architect at Dynamite Data.

Hard disk drive inventories plummeted in October. (Source: Dynamite Data)

"The first flooding was Oct. 8 and within a week, two weeks at the most, almost all that inventory at distribution had dried up," Kubicki said. "I'm not sure if that was distributors getting the inventory recalled from them or if it was getting purchased that fast. I think consciously people moved it out of distribution and into system manufacturers."

Over the past few weeks, hard drive prices have leveled off and have begun to drop slowly, according to Dyanamyte's data.

"For first time, less than week after Western Digital's first [fabrication plant] went back on line, drive inventory began increasing at both distributors and ecommerce sites, and index prices began coming down a little too," Kubicki said.

IDC has predicted that hard disk drive supply shortages in the wake of Thailand flooding would affect consumers, computer system manufacturers and corporate IT shops into 2013.

After floods hit a dozen manufacturing facilities in Thailand, hard drive prices skyrocketed. More recently, however, prices have begun to settle down. (Source: Dynamite Data)

Fang Zhang, an analyst with market research firm IHS iSuppli, said he also saw "a few" HDD price drops -- especially in the retail market this month -- from the historical highs after the floods.

However, Zhang cautioned that certain drive inventories are still short, such as 500GB and 1TB capacity models for both desktop and notebook PCs.

Zhang said he expects hard drive supplies to be at their low point next quarter, but he said prices will begin to decline in the latter part of the first quarter of 2012.

"And the trend will continue throughout 2012," he said in an email reply to Computerworld. "HDD Supply could meet demand in [the third quarter of 2012] because production volumes will start to increase in [the first quarter of 2012]."

 

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