Worldwide HDD Shortage

[corporalgator]

If you hadn't noticed, HDD prices are spiking due to the flooding in Thailand. The shortage is expected until 1st quarter 2012. Retailers are the first to be shorted and system makers are #1 priority, so don't expect to get an HDD cheap for a while.

[JarrettH]

Yeah it's real, $150-200 for 1tb

[Ghitulescu]

Like ALL HDDs were manufactured in Thailand come on.

That's again a dirty trick to cope with falling prices ....

[CruNcher]

But in this case it's about Production capacities demand and availability losing some plants (even temporarily) isn't recoverable so prices go up is normal sure not all HDDs are manufactured in Thailand but a big amount that gone lost according to the industry (if demand stays the same you have a problem or better those that can supply the demand can higher the prices, efficiency wise the backups are close to a specific demand). Sure the thing is how do we know the demand is currenly so high and availability has been hit on that matter we have to trust the industry (we just saw there was a flood some plants drowning in water and that's it,apart from those that died which weights much more then some HDD plants go swimming)

[LoRd_MuldeR]

Originally Posted by JarrettH

Yeah it's real, $150-200 for 1tb

Yup, it's crazy! I bough a 2 TB drive for ~55€ two month ago. Now the same drive is at ~225€.

Originally Posted by Ghitulescu

Like ALL HDDs were manufactured in Thailand come on.

That's again a dirty trick to cope with falling prices ....

Well, as a matter of fact, there aren't that many companies who actually manufacturer HDD's. Most are just resellers.

And, as far as I have read, Western Digital alone (market leader for HDD's) lost 60% of its production due to the Bangkok flooding.

Even if the other HDD manufacturers weren't effected by the flooding (but in fact they are too), they couldn't increase their production quickly to compensate for that.

Also I would assume that most HDD manufacturers/resellers will give higher priority to the OEM market, making HDD's you buy separately even more expensive...

(BTW: I think the same could easily happen with CPU's/GPU's, because most "microchip" companies are fabless, i.e. don't manufacture their chips themselves anymore)

[Ghitulescu]

A quick check on my external HDDs (around 12) and none made in Thailand (but Korea, Philippines, China). I have only one (new) WD, a Velociraptor, but it's inside and I can't open it yet to check its origin.

Some time ago, around the introduction of DDR1 on the market, a quake hit Taiwan. The prices for memory chips skyrocketed, yet when the factories went back to work, the newer models like DDR2/RAMBUS went back to "normal" but those for DDR1 still remained insane. At the time there were manufacturers that had fabs in China and Korea as well, which were not affected (Samsung, Infineon and Siemens to name a few manufacturers active on the German market).

Given these I still think it's a marketing trick to raise the prices, using a natural disaster as a smokescreen.

[hello_hello]

I just checked the 13 loose internal (not external) hard drives I have on my desk, purchased some time over the last 3 to 4 years.

2 x Seagate 500MB, made in Thailand.
1 x Hitachi 2TB, made in Thailand.
3 x WD Green 2TB, made it Thailand.
1 x WD Green 2TB, made in Malaysia.
2 x WD Green 1TB, made in Thailand.
4 x WD Black 1TB, made in Thailand (purchased 2 months ago).

Supply and demand would seem to indicate if a large portion of the HDD manufacturers in Thailand were effected by flooding, prices might increase for a little while. Looking at the price list of my local PC shop today compared to their price list from September, most drives seemed to have increased in price by about 40%.

If it's a marketing trick to raise prices the HDD manufacturers must be guilty of some serious price fixing.

[corporalgator]

I work for Dell tech support and we send out a lot of replacement HDDs. Our HDDs are on back order, so it's not just some industry trick.

[Ghitulescu]

I was misunderstood: of course you're on back order if you insist getting the HDDs from the same factory (now flooded). But not all HDDs are made there, and the price is raised to separate the premium customers from the bulk (it's also a game of supply/demand, and, lesser known, also a legal/contractual issue).
It's like doubling the price of a Maserati because a storm hit Detroit.

[hello_hello]

I wonder if Dell would really insist on getting their hard drives from the same factory? It seems unlikely. Dell probably order them from the hard drive manufacturer and they're shipped from wherever they're shipped. It doesn't sound like the price rise is separating the premium customers from the bulk too well, given Dell have their drives on backorder.
It does sound like a genuine hard drive shortage to me. Nothing for the conspiracy theorists to get excited about.

[Ghitulescu]

No, but Dell/HP/IBM/you-name-it has contracts for a certain model. And a particular model is manufactured in only one factory. Unless the contract allows the change to an equivalent in case that particular model won't be available, the manufacturer MUST deliver that model.

Concerning the other point: supposing the manufacturer must pay damages to Dell for not fulfilling its part of the deal, in amount of say 5 million $. If anyone having himself a hot deal (eg delivering 100.000 units to the Army at Army prices ) pays for the stock 15 million $, the manufacturer will sell them gladly, still getting a nice profit, Dell being served after recovering the facilities. Maybe the manufacturer already got covered for the Dell deal from an insurance company which makes the situation even more pinkier. The crook is the premium buyer, Dell and us the unimportant ones. Like in any restaurant, the one that pays better (or suggests this) gets the best places.

The last point: I said nothing about conspiracy, it's pure business.

[mariush]

Ghitulescu, a lot of the drives are made in Thailand - Seagate, Toshiba and WD have factories there. WD's factories are flooded, Toshiba has one factory flooded, Seagate has the factories in another part of Thailand that's not affected yet.

A lot of the drives NOT made in Thailand are made with parts made in Thailand - for example the largest hard drive motor manufacturer Nidec has the factories near WD and their factories are flooded so they stopped production. Another company that had produced disk heads and other stuff near the flooded area announced they're going to move the production to US but this meant a 1-2 week pause in production at the very least.

Seagate basically announced the demand increased a lot and they can't get the parts in the amount they needed

See these for reference:

http://www.infoworld.com/t/hard-driv...e-hikes-176453
http://www.scientificamerican.com/ar...-mean-big-loss

If you need drives right now, look up external drives - some stores have larger stocks of these and try to get rid of them or just didn't realize yet. They're right now about 20-30$ cheaper than internal drives.

[hello_hello]

Originally Posted by Ghitulescu

No, but Dell/HP/IBM/you-name-it has contracts for a certain model. And a particular model is manufactured in only one factory. Unless the contract allows the change to an equivalent in case that particular model won't be available, the manufacturer MUST deliver that model.

First it was Dell "insisting" the drives all come from the same factory.... for reasons yet to be disclosed.... now they're only made in one factory. Which by the way seems completely untrue given I have 2 x WD20EARS drives sitting on my desk with made in Thailand printed on the sticker, and 1 with made in Malaysia printed it.

Originally Posted by Ghitulescu

Concerning the other point:

Well I'll give you points for being able to invent scenarios to support your claims.

Originally Posted by Ghitulescu

The last point: I said nothing about conspiracy, it's pure business.

"Given these I still think it's a marketing trick to raise the prices, using a natural disaster as a smokescreen. "

Well given all the hard drive manufacturers are in on it and raising their prices and it's just a theory only you seem to support, I don't know what else you'd call it.
As mariush pointed out, it's not just the HDD manufacturers who were victims of flooding having production problems, others such as Seagate are finding the cost of HDD components is increasing while there's also a shortage of supply.

[Ghitulescu]

No need to argue, you're all right but still failed to explain why the price of all new HDDs raised when only one country out of several was hit by a disaster. A natural one this time.

Is the demand so huge to justify the raise of the prices? I mean the real demand, that from the customer, not that coming from industry which is based on prognosed sales figures. My point was that the common user shouldn't pay for the industry problems. When the factories moved towards East, those benefits haven't been passed to the customer. Only the costs.

It's anyway not my problem, I don't need any new HDDs nor new devices using an internal one, so they could raise the price per GB to match even the one of the memory cards, I don't care. All of you are now happy that you've found me utterly wrong and with this excuse go buy them at twice their regular price, but hurry, maybe by tomorrow it will triple Xmas is near, and CES 2012 is right after.

PS: It's also interesting to see, for the sake of argumentation, that the general consensus seems to be that the whole world production of HDDs depends on a tiny country in the middle of a politically and military unstable region, that enjoyed probably a total of only a few days of peace since 1900. Isn't that clever? Why not relocate the factories in Iraq or Afghanistan or even in Gaza?

PS2: Even if your next car (before Xmas) wouldn't be a Toyota, a Honda nor a Nissan, think twice, one never knows what parts of your GM is made in Thailand, too. The world car industry is again in peril. What would be next? The T-Shirt industry?

[hello_hello]

Originally Posted by Ghitulescu

No need to argue, you're all right but still failed to explain why the price of all new HDDs raised when only one country out of several was hit by a disaster. A natural one this time.

I would have thought the fact that 25% of the world's hard drive production was effected by flooding would be explanation enough.

Originally Posted by Ghitulescu

Is the demand so huge to justify the raise of the prices? I mean the real demand, that from the customer, not that coming from industry which is based on prognosed sales figures.

What's this "pretend" industry demand you refer to?
Should Dell or HP stop ordering hard drives to pre-assemble PCs based on projected sales and only make them to order because you or I also want to buy a hard drive?

Originally Posted by Ghitulescu

My point was that the common user shouldn't pay for the industry problems. When the factories moved towards East, those benefits haven't been passed to the customer. Only the costs.

So you have a before and after cost of production analysis, or is that a second conspiracy theory?

[mariush]

People seem to forget hard drives are not just sold in computers.

You have them in video cameras, in surveillance/anti-theft systems, and lots of other places. Then you have a need for drives to fix existing computers, for NAS mass storage, to keep raid systems working, upgrades and last but not least replacing dead drives. Take for example a datancenter with 100k computers - 3 to 5% of the drives die within 3 years so that's at least 3% of 100k / 365 x 3 = 3-5 hard drives a day to replace.

Is it smart to have a large production capacity in a single country? No. But at the same time it's consumer's fault for focusing a lot on PRICE therefore forcing companies to move their production into countries where the manual labor is cheap.

[Ghitulescu]

1. the HDDs used for the "other" purposes are different from those sold to the general public. And one should not forget that the business model is to supply, not to react to demand.
I've seen not shop to say, hey, we haven't this on stock, but if you pay the double you'll get one next day. I've seens shops saying Sorry, we have no idea when the next batch arrives, and shops that still sell them at doubled prices, on stock.
2. it's not the consumers' fault. Actually vice-versa. They moved to China and let the prices stay unchanged, and only after the Attack of the Chinese Clones they dropped the prices to remain in business. I can't speak for all world, but this is how it happened in Germany.

[hello_hello]

It doesn't change anything if hard drives used for other purposes are different from those sold to the general public, and in this case supply has been effected while demand initially remained the same (at least until prices increased), so I'm not sure what point you're trying to make there.
For someone who has "doesn't need any new HDDs nor new devices using an internal one" you seem to be paying an unusual amount of attention to whether shops have them in stock and what prices they sell them at if they do. Have you been visiting shops pretending to be a prospective buyer in order to perform HDD purchase surveys? And how does what you've seen actually reveal anything other than a drop in supply?

[Asmodian]

Originally Posted by Ghitulescu

No need to argue, you're all right but still failed to explain why the price of all new HDDs raised when only one country out of several was hit by a disaster. A natural one this time.

Supply/Demand curves, if you have less supply raise the price until demand meets supply. That way you make the most money. Econ 101

Originally Posted by Ghitulescu

PS: It's also interesting to see, for the sake of argumentation, that the general consensus seems to be that the whole world production of HDDs depends on a tiny country in the middle of a politically and military unstable region, that enjoyed probably a total of only a few days of peace since 1900. Isn't that clever? Why not relocate the factories in Iraq or Afghanistan or even in Gaza?

Trust me they would if they could get reasonably stable labor and supply chains setup and total costs were lower. Business never thinks long term or worst case, it isn't (usually) cost effective.

[burfadel]

If there's trouble in China, due to civil war (China invading other countries is pretty unlikely, although should never rule anything out), then we're in real strife. 'We're' as the whole world 'we're'. This is something that is quite possible in 10-30 years, as the political divide in China grows greater.