Impact of Thai floods could hurt global hard drive supply for another year, IDC predicts.
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 ofnext year. We expect the situation will improve, but it won’t feel asif things are back to normal until 2013,” said John Rydning, an IDCanalyst who follows the hard disk drive market.
Rydning said supplies will increase to the point where it will bepossible to meet “immediate demand” in the second half of next year,but distribution channels, online retail sites and systemmanufacturerswill continue to feel the affects into the following year.
This week, Lenovo sent an email to its corporate IT customers tellingthem it is out of a number of hard disk drives, including the highlypopular 7,200-rpm models.
In the email obtained by Computerworld, a Lenovorepresentative stated that customers who normally purchase systems with160GB 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 remainsfluid and is monitored daily by the company’s executives.
“Akin to the hysteria when banks defaulted in the 1930[s], PC ordersacross the industry are being placed for which HD supply does notexist,” the rep wrote. “The Lenovo Global Supply Chain (GSC) Team isproviding updates throughout each day. In this regard, we will all haveto be flexible and adjust expectations. Simply put, the configurationto which you have been accustomed, unfortunately may now be in default,and we’ll have to adjust our configuration and build a system that hasan available hard drive,” the email stated.
Lenovo said it will swapunavailable drives for another product theindustry can still provide, such as a 5,400-rpm model. Even then,customers will have to wait an additional 45 to 60 days for thosedrives to become available, the email stated.
According to the Lenovo email, the drives that are unavailable for someThinkPad laptops include 750GB5,200-rpm models and those withconfigurations 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 ofwhat we can expect for the next six months. There will be drivesavailable 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 beganin the northern part of Thailand and worked its way south. Farthestnorth is the Rojana Industrial Park, which has since been drained offloodwaters and is coming back online.
Hitech, which makes drivecomponents, has also been drained. Bangpa-in, Western Digital’s largesthard drive production facility, was partially affected. And Navanakorn,where both Western Digital and Toshiba perform hard driveassembly, isstill being affected by the floodwaters.
While it’s difficult to predict how specific disk drive vendors willallocate supplies to computer system customers, manufacturers generallyare likely to ensure that makers of enterprise systems are taken careof first, Rydning said.
Computer system manufacturers will also be high on the list, whileconsumers who buy disk drives at retail stores will be at the bottom,Rydning said.
In late November, hard-drive maker Seagate Technology statedthat the Thailand floods would cause hard disk drive supplies to besignificantly constrained for several quarters. For the quarter endingin December, the company said the industry will ship between 110million and 120 million units.
According to IDC, this quarter’s hard drive shipments will fall about30% below demand. “We think the industry will ship about 120 millionunits, and demand was 175 million units, so you get the idea of theimpact from the floods,” Rydning said.
Market research firm IHS iSuppli said the drive shortage will cause PCshipments in the first quarter of 2012 to be about 3.8 million unitslower 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 stated onThursday.
ISuppli predicts that worldwide PC shipments in the first quarter of2012 will amount to 84.2 million units; it had earlier pegged thenumber of first-quarter shipments at 88 million units.
In a response to a Computerworld inquiry, PC maker Dell said thecomplexity of the problem makes it difficult for the industry topinpoint the magnitude or duration of hard drive shortages.
“Over the past two months, Dell has made strategic purchases ofinventory and pulled in supply. The direct model has advantages in thisenvironment,” a spokesman stated in an email response. “We have teamsworking with impacted suppliers to manage our HDD supply chain andqualify new sources of supply. Our goal is to mitigate any impact toour customers and Dell.”
Because of the shortages, hard drive prices have skyrocketed over thepast month, in some cases as much as 100%.
Despite concerns about rising HDD costs, there are indications thatprices 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 CaviarGreen 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 of250%. Today the drive sells at Newegg for $162.99.
However, not all prices are on the downswing. For example, onPriceGrabber.com, the priceof a Seagate Barracuda 1TB 7,200-rpm drive has climbed steadily from anaverage $140 in late Oct. to $192 today.