The impending hard drive shortage -- and possible price hikes

Flooding near Bangkok has taken about 25 percent of the world's hard disk manufacturing capacity offline

By Woody Leonhard

If you're going to need hard drives this year or early next year, it would be smart to get your sources locked in now.

Disk manufacturing sites in Thailand -- notably including the largest Western Digital plant -- were shut down due to floods around Bangkok last week and are expected to remain shut for at least several more days. The end to flooding is not in sight, and Western Digital now says it could take five to eight months to bring its plants back online. Thailand is a major manufacturer of hard drives, and the shutdowns have reduced the industry's output by 25 percent.

Western Digital, the largest hard disk manufacturer, makes more than 30 percent of all hard drives in the world. Its plants in Ayutthaya's Bang Pa-In Industrial Estate and Pathum Thani's Navanakorn Industrial Estate together produce about 60 percent the company's disks. Both were shut down last Wednesday. (Western Digital also has a major plant in Malaysia that hasn't been affected by the floods, so some production will likely shift to that plant.)

Fourth-ranked hard-disk manufacturer Toshiba makes more than 10 percent of the world's hard disks, and half of its capacity is in Thailand. Toshiba's plant has also been closed due to flooding.

Key disk component suppliers have also been hit. Nidec, which makes more than 70 percent of all hard drive motors, has temporarily suspended operations at all three of its plants in Thailand, affecting 30 percent of its production capacity. Hutchinson Technologies, which makes drive suspension assemblies, has also suspended operations due to power outages, although it says it will shift operations to its U.S. plant.

Seagate, the second-largest hard disk manufacturer, has two plants in Thailand, but neither is in the flooded parts of the country. Seagate notes that "the hard disk drive component supply chain is being disrupted and it is expected that certain component in the supply chain will be constrained." Translation: Component prices are going up, at least for some parts.

It's not clear whether that will affect the prices you pay. As a testament to adequate supply and lower-than-expected demand, retail prices of hard disks have not taken off: You can still get 1TB and larger SATA drives from popular websites for about the same price now as they were in September. Even if manufactuers hold the line on the product price, it's highly that unlikely disk prices will go down any time soon.

Source: http://www.infoworld.com/t/hard-drives/the-impending-hard-drive-shortage-and-possible-price-hikes-176453

-- infoworld.com 2011-10-19

there is plenty of land in Thailand that doesn't flood, like on the road to Korat around Pak Chong where Seagate is. smart businesses you think would set up shop there.

there is plenty of land in Thailand that doesn't flood, like on the road to Korat around Pak Chong where Seagate is. smart businesses you think would set up shop there.

Seagate did exactly as you said - built outside of the flood plain. But many of the suppliers who sell them parts for hard drives were in the flooded areas.

Suppose the price of land around Chiang Mai will see a significant increase soon? What, with the international airport, less flooding, major highways and rail link, gateway to China, large work force, lower cost of living than Bangkok, higher education than in Isaan, plentiful housing, on and on, it seems like the place for industry--and just about everyone!--to relocate. Don't sell the farm just yet.

Last time it was the tsunami blamed for the increase in price......apparently some parts are still made in Japan and only assembled here.

But you can bet that pirces will rise it is unlikely that local retailers will miss out on the opportunity for some serious price gouging - they certainly did last time.

Let's see if they announce how long these guys are off line. I'm curious.

If anyone has a reasonable estimate, that would be interesting to know.

There will be a lot of pressure to assure supply - maximum production capacity elsewhere and to get operational again.

Again another sensationalist and totally untrue headline from Thai Visa -- this becomes rather tiring when the headlines are designed only to 'grab' readers.

The headline says " Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline", which might be newsworthy if true. The truth is that Thailand assembles 25 % of the HDD supply for the world -- many facilities are not shut down, such as the Seagate facilities which are not flooded, and the factories in Lamphun and elsewhere. The article, of course, does not confirm either the headline or the truth.

The truth ? --- read :

http://www.isuppli.com/Memory-and-Storage/News/Pages/Thailand-Flood-Disrupts-Hard-Disk-Drive-Supplies.aspx

I know you can't believe all you read, but it would be nice for TV to make an effort to be a reliable news source.

Again another sensationalist and totally untrue headline from Thai Visa -- this becomes rather tiring when the headlines are designed only to 'grab' readers.

The headline says " Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline", which might be newsworthy if true. The truth is that Thailand assembles 25 % of the HDD supply for the world -- many facilities are not shut down, such as the Seagate facilities which are not flooded, and the factories in Lamphun and elsewhere. The article, of course, does not confirm either the headline or the truth.

The truth ? --- read :

http://www.isuppli.com/Memory-and-Storage/News/Pages/Thailand-Flood-Disrupts-Hard-Disk-Drive-Supplies.aspx

I know you can't believe all you read, but it would be nice for TV to make an effort to be a reliable news source.

We prefer wildly inaccurate and apocryphal reporting. It gives us something to fight over and makes life more interesting.

agreed, although if nidec is a single-source motor for 70% of the drives and they have shut down 30% of their capacity, then you're close to 1/4 of the WW production. If Tosh and WD are not 100% nidec motors, then you could be closer to 25%.

More interesting to know is to drill down on the models out of production to see which PC makers / markets are impacted. In other words, not everyone will feel the pain equally, and some OEMs may have gotten a nasty surprise in the last week or two.

Again another sensationalist and totally untrue headline from Thai Visa -- this becomes rather tiring when the headlines are designed only to 'grab' readers.

The headline says " Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline", which might be newsworthy if true. The truth is that Thailand assembles 25 % of the HDD supply for the world -- many facilities are not shut down, such as the Seagate facilities which are not flooded, and the factories in Lamphun and elsewhere. The article, of course, does not confirm either the headline or the truth.

The truth ? --- read :

http://www.isuppli.c...e-Supplies.aspx

I know you can't believe all you read, but it would be nice for TV to make an effort to be a reliable news source.

Again another sensationalist and totally untrue headline from Thai Visa -- this becomes rather tiring when the headlines are designed only to 'grab' readers.

The headline says " Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline", which might be newsworthy if true. The truth is that Thailand assembles 25 % of the HDD supply for the world -- many facilities are not shut down, such as the Seagate facilities which are not flooded, and the factories in Lamphun and elsewhere. The article, of course, does not confirm either the headline or the truth.

The truth ? --- read :

http://www.isuppli.com/Memory-and-Storage/News/Pages/Thailand-Flood-Disrupts-Hard-Disk-Drive-Supplies.aspx

I know you can't believe all you read, but it would be nice for TV to make an effort to be a reliable news source.

Thailand makes more than 25% of the world's hard drives. Just the factories knocked out constitute 25%. The Western digital factories in Thailand alone make 20% of the hard drives in the world, and the Toshiba factory makes 5%. These are closed because of floods. Seagate is not closed and is not counted in the 25% figure

So who should we buy shares in ??

China will most likely pick up the slack and make windfall profits.

Again another sensationalist and totally untrue headline from Thai Visa -- this becomes rather tiring when the headlines are designed only to 'grab' readers.

The headline says " Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline", which might be newsworthy if true. The truth is that Thailand assembles 25 % of the HDD supply for the world -- many facilities are not shut down, such as the Seagate facilities which are not flooded, and the factories in Lamphun and elsewhere. The article, of course, does not confirm either the headline or the truth.

The truth ? --- read :

http://www.isuppli.c...e-Supplies.aspx

I know you can't believe all you read, but it would be nice for TV to make an effort to be a reliable news source.

Thailand makes more than 25% of the world's hard drives. Just the factories knocked out constitute 25%. The Western digital factories in Thailand alone make 20% of the hard drives in the world, and the Toshiba factory makes 5%. These are closed because of floods. Seagate is not closed and is not counted in the 25% figure

yep, see now where I misunderstood / misread at first... isuppli pointed out

A total of 25 percent of worldwide HDD assembly facilities are located in Thailand.

which is not the same as 25% of the volume.

Let's see if they announce how long these guys are off line. I'm curious.

If anyone has a reasonable estimate, that would be interesting to know.

There will be a lot of pressure to assure supply - maximum production capacity elsewhere and to get operational again.

A friend of mine works for the industry in Ayutthaya. He told me this morning it would take 6 months to restart his factory. That is not a good prognostication.

Let's see if they announce how long these guys are off line. I'm curious.

If anyone has a reasonable estimate, that would be interesting to know.

There will be a lot of pressure to assure supply - maximum production capacity elsewhere and to get operational again.

A friend of mine works for the industry in Ayutthaya. He told me this morning it would take 6 months to restart his factory. That is not a good prognostication.

How extensive is the equipment damage?

Let's see if they announce how long these guys are off line. I'm curious.

If anyone has a reasonable estimate, that would be interesting to know.

There will be a lot of pressure to assure supply - maximum production capacity elsewhere and to get operational again.

A friend of mine works for the industry in Ayutthaya. He told me this morning it would take 6 months to restart his factory. That is not a good prognostication.

OUCH !

Let's see if they announce how long these guys are off line. I'm curious.

If anyone has a reasonable estimate, that would be interesting to know.

There will be a lot of pressure to assure supply - maximum production capacity elsewhere and to get operational again.

A friend of mine works for the industry in Ayutthaya. He told me this morning it would take 6 months to restart his factory. That is not a good prognostication.

How extensive is the equipment damage?

I would have liked to chat with him some more but he had urgent things to take care of. Hopefully I'll have another opportunity to chat tomorrow.

Again another sensationalist and totally untrue headline from Thai Visa -- this becomes rather tiring when the headlines are designed only to 'grab' readers.

The headline says " Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline", which might be newsworthy if true. The truth is that Thailand assembles 25 % of the HDD supply for the world -- many facilities are not shut down, such as the Seagate facilities which are not flooded, and the factories in Lamphun and elsewhere. The article, of course, does not confirm either the headline or the truth.

The truth ? --- read :

http://www.isuppli.c...e-Supplies.aspx

I know you can't believe all you read, but it would be nice for TV to make an effort to be a reliable news source.

However ever much of an exaggeration this is, I'll warant it will not deter the wholesalers and retailers from using this apocrypha as an excuse to gouge prices - watch Banana IT in particular.

Edited October 20, 201114 yr by cowslip

Let's see if they announce how long these guys are off line. I'm curious.

If anyone has a reasonable estimate, that would be interesting to know.

There will be a lot of pressure to assure supply - maximum production capacity elsewhere and to get operational again.

A friend of mine works for the industry in Ayutthaya. He told me this morning it would take 6 months to restart his factory. That is not a good prognostication.

I've heard that it will be a 4-6 weeks just to get the water out.

Thailand, hub of hard drives!!!!!!

Thailand, hub of hard drives!!!!!!

Thailand hub of floating hard drives.

Suppose the price of land around Chiang Mai will see a significant increase soon? What, with the international airport, less flooding, major highways and rail link, gateway to China, large work force, lower cost of living than Bangkok, higher education than in Isaan, plentiful housing, on and on, it seems like the place for industry--and just about everyone!--to relocate. Don't sell the farm just yet.

Wasn't Chiang Mai the first major city to be flooded?

Suppose the price of land around Chiang Mai will see a significant increase soon? What, with the international airport, less flooding, major highways and rail link, gateway to China, large work force, lower cost of living than Bangkok, higher education than in Isaan, plentiful housing, on and on, it seems like the place for industry--and just about everyone!--to relocate. Don't sell the farm just yet.

Wasn't Chiang Mai the first major city to be flooded?

Yup, but only the city centre tourist zone in reality, such industrial areas as Chiang Mai has, were pretty much unaffected other than from normal standing rainfall on the lawns and road hollows.

China will most likely pick up the slack and make windfall profits.

western Digital are hardly likely to build another factory....if they already have other production facilities, I'm sue they and other companies are already making plans to increase production there............

China will most likely pick up the slack and make windfall profits.

western Digital are hardly likely to build another factory....if they already have other production facilities, I'm sue they and other companies are already making plans to increase production there............

a couple of articles I had not seen posted here. Good quotes in the ZD article. Forbes indicates that the channel is stockpiling drives now due to the uncertainty of supply.

ZDnet

Forbes

isuppli webinar on this topic in 2 days

Thailand's Flood and the Ripple Effect on High Tech Industries

Shouldnt it be Ayuthaya flooding rather than Bangkok flooding?