Seagate: Hard drive supplies could be affected through late 2012

By on November 18, 2011, 7:30 AM

If you were hoping to stock up on cheap storage this holiday shopping season, you might be disappointed. Not only could the recent flooding in Thailand slow hard drive shipments through the fourth quarter of this year, supplies could be affected through the end of 2012, according to Seagate CEO Stephen Luczo.

Although Seagate's shipments are affected by the disaster, the company has been in good fortune. Two of its large factories have been spared by the floodwaters, but its business partners haven't been so lucky -- and therein lies the heart of the matter. Even though Seagate's facilities have remained out of harm's way, the company relies on parts from 130 or so suppliers, many of which are still under several feet of water.

Western Digital and Toshiba have factories in the flood zones and all told, the industry is expected to ship 50 million drives short of its 180 million target. Despite that gloomy projection, many sources claim that the crisis isn't as bad as it looks. One such article by DigiTimes yesterday says hard drive prices could begin dropping by December and that the balance between supply and demand is "not as serious as originally expected."

Some of the optimism stems from the relatively weak PC demand. Others cite the recovery of a Nidec plant that produces HDD motors. DigitTImes' sources believe we will see an "obvious improvement" in the situation by January 2012. Seagate's boss isn't so confident, however. "This is going to take a lot longer than people are assuming, until the end of 2012 at least," he told Bloomberg. "And by then, demand will have gone up."

The industry is hopeful that floodwaters will disperse by early December, so Luczo believes it's unrealistic to expect a full rebound by early or mid-2012. The situation is more complicated than just waiting for water to dissipate. Many facilities will have to replace their gear and some will be forced to relocate. Neither will be cheap and Seagate is reportedly fronting loans to some of its suppliers so they can get back on their feet.

User Comments: 7

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Burty117 Burty117, TechSpot Chancellor, said:

Well I've now ordered the SSD, I really would like to order a Velociraptor but the price went from £130 to £180

Ranger1st Ranger1st said:

and why wouldn't they claim end of 2012.. perfect way to artificially induce a 'supply' issue and up the profit margins across the board.

captainawesome captainawesome said:

@ Ranger1st - exactly what I wanted to say. What is likely a 2 to 4 week supply set back has become a years "shortage of supply" issue. I rate these hard drive manufacturers are using this as an excuse to squeeze some extra juice outta us poor consumers.

This is probably going to mean pricier SSD's as well And I was hoping to pick one up by Christmas time (Vertex 3)

Leeky Leeky said:

Well I've now ordered the SSD, I really would like to order a Velociraptor but the price went from £130 to £180

That's not too bad. I went to order another Samsung Spinpoint F3 1TB to stripe with my existing F3 and found the price is now £103.32. Less than four months ago I paid £38 for the very same disk, from the same place.

I also fancied a couple more 2TB Spinpoint F4's to add a bit of security to my current backup RAID. Since grabbing my last two a few months ago at £53 a pop they're now £133.44. OUCH!

Rather gutted really, was hoping to grab a few more before I build my new SB-E system. I don't see to have noticed any real increase to SSD prices though, so will grab a couple of 90/120GB Vertex 3's (or whatever at the time) to run in RAID for my new setup instead.

LNCPapa LNCPapa said:

Here's a great site I use to show price trending at newegg. Give it a shot on some hard drives to get a real shock.

fpsgamerJR62 said:

I was able to grab a pair of 2 TB Caviar Black HDDs just before the prices started rising. Whether the HDD supply is being artificially manipulated or not, I'm not in a position to comment but the PC retailers in my area are definitely feeling the pinch especially since they sell a lot of complete OEM PCs to their corporate clients.

Guest said:

I was planning on upgrading the 6 drives in my NAS but was waiting for the 3Tb drives to drop in price once the 4Tb drives were in circulation. Now I have to extend my wait :-(

I also heard at CES 2012 next week two companies will announce 5Tb drives however I am sure availability will be close to zero and the price will be astronomical.

I hope the manufactures don't use this as a way just to make more money and will be able to sort out the supply issue quickly and bring the price back down to previous levels in the next couple of months.

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