Flooding causes spike in HDD prices, Asus might run out this month

By on November 3, 2011, 6:04 PM

The catastrophic flooding in Thailand is expected to cause a drastic shortage of hard drives according to researchers at iSuppli. Some 660,000 Thailand residents are reportedly out of work after the country shuttered 14,000 factories, including facilities that produce hard drives for Western Digital and Seagate. Hard drive shipments are expected to decline 27.7% from 173 million units in the third quarter to 125 million in the fourth.

Both companies have adjusted their shipment estimates, but they've raised prices to meet revenue forecasts. Average hard drive prices will increase by 10% according to iSuppli, but certain models have increased by as much as 20 to 40%. Western Digital has been more affected by the flooding and analysts believe the company will lose market share to Seagate, which has roughly double the shipment forecast for the present quarter.

Although some vendors have sufficient stock reserves to avoid disruption in desktop and notebook shipments for months, Asus isn't so fortunate. The Taiwanese manufacturer expects to ship 4.1 million notebooks, 600,000 Eee Pads and 1.2 million Eee PCs in the fourth quarter, down from 4.3 million, 800,000 and 1.3 million in the third quarter. At least part of that forecasted decline is blamed on the production crunch in Thailand.

Aerial shot of a residential district in northern Bangkok -- via Boston

Asus only has enough drives to make it through the end of November. "Substitutes for HDD are very few, so if the situation persists, not only notebook production will be affected but also desktops, and other component shipments will also drop," Asus CFO David Chang told Reuters. Unfortunately, there doesn't seem to be any quick relief in sight and the Thai government has said it hopes to have factories running again in three months.

The price hike has already trickled down to the consumer market. Skimming through Newegg, the 1TB Samsung Spinpoint F3 has risen about $70 to $140 and most 2TB drives are well beyond the $200 mark. Western Digital's 1TB Caviar Green is up to $130 while the performance-oriented Caviar Black has jumped to $170. Unsurprisingly, the new 3TB drives have also increased drastically with Hitachi's Deskstar and Ultrastar at $400.

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