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November 07, 2011

Prices on Hard Drives Jump 180 Percent after Flooding in Thailand

Prices on hard drives have jumped as much as 180 percent after flooding in Thailand, according to news reports.

Zorinaq is reporting that 1TB drives had the largest price increases. Blogger Marc Bevand reports he observed on Newegg that 1TB SATA hard drives increased in a month from $50/TB to $140/TB, a jump of 180 percent, which is “almost triple the price,” he says.

In his analysis, blogger James Hamilton is predicting – based on data from Noble Financial Equity Research – that “significantly higher drive and component prices” will be “persisting into the summer months of 2012.” He adds that Seagate will be the “principal beneficiary of the supply shortage and higher pricing,” and Western Digital (News - Alert) was “hit the hardest by the floods.”

Also, Bevand reports that between Oct. 15 and 21 water “penetrated the Bang Pa-in Industrial Park, the Navanakorn Industrial Park (the largest of its kind in Thailand), and the Bangkadi Industrial Park.” Western Digital's and Toshiba's (News - Alert) plants in Thailand were “rendered inoperable,” he says. The industrial parks are situated in Pathum Thani province.

Digital Trends reports some 60 percent of Western Digital’s hard drive manufacturing occurs in Thailand, with about 50 percent of Toshiba’s manufacturing taking place in Thailand. Also, Western Digital’s plant in the Bang Pa-In industrial park made 25 percent of the global supply of “sliders,” used in hard drives, Digital Trends said.

Over a thousand factories in Thailand closed because of flooding and related damage, according to news reports.

Meanwhile, in a report carried on TMCnet the San Jose Mercury News reported the impact from flooding “could ripple across the global tech economy and disrupt an array of industries, from PC makers to cloud computing.”

“Thailand supplies about 40 percent of the world's hard disk drives – the heart and muscle of most computers – and is also a major producer of parts that are shipped to hard-disk-drive makers in other countries. With many factory floors now under water, the country's hard drive output could be slashed by 25 to 40 percent, according to research firm IDC (News - Alert),” says The Mercury News. The impact would lead to computer manufacturers “to scramble to find other sources of hard drives and pinch their profit margins should the dearth of the devices push prices up. Other industries could be hurt, as well.”

In addition TMCnet reported that hard drives – such as those made by Seagate, Western Digital, Hitachi (News - Alert) and Samsung increased by 40 to 90 percent (if not more) – at online sites at the end of October, citing news reports. InfoWorld was monitoring the prices and concluded that “consumers, businesses, and IT organizations are getting gouged.”


Ed Silverstein is a TMCnet contributor. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves
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