Good news everybody! The HDDs are coming back

Subject: General Tech | February 24, 2012 - 12:38 PM |
Tagged: flooding, thailand, hdd

It won't be completely back to normal but if DigiTimes' information is correct the HDD industry is getting back on their feet after the flooding in Thailand wiped out several fabs.  This is not just great news for your average consumer or enthusiast but also for businesses that have had server upgrades and maintenance postponed since stocks of enterprise HDDs dried up.  While it may seem funny that NewEgg limits the number of units you can buy for some of their stock, it is not so funny for a company that needs to rebuild a 10 disk RAID on a SAN.  By Spring we should see a return to stock levels of about 80% and prices about 30% higher than what existed on the market previously which will help out a lot of bottom lines as well as bring much needed money into Thailand to help with the recovery.

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"The global production capacity of hard disk drives (HDDs) will increase to 140-145 million units, about 80% of the level before flooding hit Thailand in late 2011, in the first quarter of 2012, according to industry sources.

HDD makers exhausted their inventories of products and components in December 2011 and January 2012, the sources indicated. However, HDD vendors have not hiked quotes due to the off-season.

Among HDD vendors, Hitachi Global Storage Technologies and Seagate Technology have suffered less damage from the flooding and therefore have moved faster in restoring production capacities, compared to Toshiba and Western Digital, the sources indicated."

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Source: DigiTimes

Have HDD prices started to come back from the stratosphere?

Subject: General Tech | February 7, 2012 - 11:55 AM |
Tagged: hdd, thailand, flooding

TechSpot did some number crunching to develop the chart you can see below which tracks the price of HDDs from September, before the flooding in Thailand straight through to last week.  The spike upwards as stock and manufacturing capability was destroyed is easily noticeable but then the pattern starts to fragment.  The Green lines from Seagate and WD seem to have the most resiliency, being among the first to start decreasing in price and the only ones with a still declining price.  The large drives, such as the 3TB Barracuda not only declined to reduced their price but are actually getting more expensive.  The mobile side of the market is also covered though it does not seem as hard hit as their desktop cousins.  They didn't collect data on Enterprise drives, which are few and far between for anyone looking to grow their data centre, since it is the mobile and desktop HDDs which interest most readers.  Check out the numbers here.

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"The hard disk drive supply chain was hit hard late last year when a series of floods struck Thailand. The Asian country accounts for about a quarter of the world's hard drive production, but thousands of factories had to close shop for weeks as facilities were under water, in what is considered the world's fourth costliest natural disaster according to World Bank estimates. That's on top of the human cost of over 800 lives."

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Source: TechSpot

SSD and HDD Price Analysis: End of Shortage In Sight?

Subject: Storage | December 18, 2011 - 11:20 AM |
Tagged: WD, thailand, ssd, Seagate, hdd, Hard Drive, flooding

The hard drive industry might be recovering more quickly than expected and the entire tech field should be hoping that is the case.  We have been covering the unfortunate disaster in Thailand and the accompanying disruption in the world of storage since things first started hitting the fan in October.  The initial result was a very dramatic price increase on traditional spinning disks - prices going up as much as 200% in some cases.  This week we got our hands on some very interesting data from Dynamite Data, a company focused on channel monitoring, that they were willing to let us share with you.

First, the bad news that we already know about - the price increases we have seen percolate throughout the entire industry in the last two months.

ssd_hddpriceindex.png

Click to Enlarge

This graph shows the average price of the top 50 spinning disk drives over the last year in red and the very specific Western Digital Velociraptor 150GB pricing on Amazon.com in blue.  You can see that around October 16th the big price increase began and over the entire ecommerce span that Dynamite Data monitors, prices on the top 50 HDDs went up by 42%.  And while not shown in the graph, other provided data shows that at its peak the low-cost leaders in the HDD market increased their prices by 150% as of early December.

Why did this happen?  Looking at inventory levels clearly shows the drop in availability.

ssd_hddinventory.png

Click to Enlarge

Based on those same top 50 SKUs, we saw ecommerce inventory drop by 90% in late October (in less than one week!) after the first impact on the supply chain that occurred on October 8th. What is interesting is that it took a week or more for the price changes to take place based on the analysis of the disaster in Thailand.  Much to the dismay of many of the conspiracy theorists out there though this data definitely backs up the price increases from WD, Seagate and others. 

There is an uplifting bit of news in both of the above the graphs though - look towards the end of the time lines of gathered data.  Both show movement in the direction of consumer's interests: a jump in inventory and a drop in average pricing.  WD announced on November 30th that the first of its production facilities was back online and we are already seeing results.  Of course the CEO of Seagate is still claiming that it will take more than a year for the industry to recover but it looks like supply may increase at a quicker rate than initially expected. 

Finally, just for a bit of added bonus coverage, many have wondered if the price increase on traditional spinning drives would affect the pricing of SSDs.  Well, it looks like did at least for a 10 day span.

ssd_priceindex.png

Click to Enlarge

Over the last year prices for solid state drives have dropped by 23% on the top 50 devices available with one minor hiccup.  In a 10 day period between the end of October and early November, there was an SSD price increase that isn't explainable by any kind of inventory changes or supply line changes.  This was likely due to the HDD shortage and vendors looking to maximize profits when consumers didn't have access to the low cost hard drives they were used to.  But because the price increase lasted such a short time I think we can clearly see that customers didn't fall for the ploy and the hiccup was quickly self-corrected.

Even though we have been monitoring prices on our own since the Thailand disaster first occurred, it is great to get some hard data to put alongside our presumptions.  While there is tons of bad news still to digest for at least the first two quarters of 2012, the information provided by Dynamite Data provides some hope that the worst is behind us.  If you are interested in more analysis of this data and you will be at CES in January, you should stop by the Storage Visions conference where there will be a short talk on the topic. 

Seagate says hard drive industry will take a year to recover

Subject: Storage | November 19, 2011 - 04:25 PM |
Tagged: thailand, Seagate, Hard Drive, flooding

Last month we noticed that hard drive prices were spiking very high and we took a quick look at exactly why this was: most notably, the devastating flooding in Thailand.  While at one point you could buy 2TB hard drives for under the $100 mark when on special, those days seem long gone.  Our original story quoted the CEO of Western Digital as saying it could take "multiple quarters" for recovery to occur.

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Pricing graph from Pricegrabber.com for Western Digital Caviar Black 2TB

According to this quote seen on Bloomberg, Seagate's CEO, Stephen Luczo, says it might be much worse:

The projections by some Wall Street analysts that production will be back to pre-flood levels by summer are nonsense, Luczo says.

“This is going to take a lot longer than people are assuming, until the end of 2012 at least,” he says. “And by then, demand will have gone up.”

Well....crap.  Users looking to build new systems or even buy them from third parties will likely see increases in costs because of this.  And while not every need can really be addressed by SSDs (I type while looking for room on a system using one to install Skyrim...), the hard drive price increases could drive quicker adoption of solid state media in the near term. 

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In the interim, if you happen to find a good deal on spindle based hard drives, you might want to gobble them up!  Newegg has 2TB hard drives starting at $199 while Amazon has some starting at $174.

Source: Bloomberg

Of hens teeth and hard drives

Subject: General Tech | November 4, 2011 - 11:42 AM |
Tagged: hdd, thailand, flooding, western digital, Samsung

According to SemiAccurate both Western Digital and Samsung will cease shipping hard drives to suppliers and retailers because of the devastating flooding in Thailand.  Both companies need to find a new source for head stacks and drive motors and Western Digital will need temporary manufacturing facilities while they wait for the flood waters to recede and repairs to start on their damaged factory.  Expect to see this have large effects on the industry as major suppliers like Dell, Acer, ASUS and HP do not tend to keep large supplies of hard drives lying around in storage which means that only the models with SSDs inside will be able to be manufactured and shipped out.  That reduction in production in turn will effect motherboard, GPU and CPU manufacturers as the demand for their products drop.  While you will not convince the 11,000+ Thai people who have been displaced by the flooding that the fate of Western Digital's factory is the biggest impact of this disaster, for many in the western world it is the only reason they are paying attention to this story.

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"According to sources that we have spoken with in the Taiwanese market both Samsung and Western Digital have decided to suspend shipments of disk drives to PC makers in Taiwan due to a parts shortage."

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Source: SemiAccurate