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.

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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 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.

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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.

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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. 

December 18, 2011 | 11:27 AM - Posted by pdjblum

Very nice analysis and presentation.

BTW, why didn't you hook up with me when you were in austin?

December 18, 2011 | 11:33 AM - Posted by Ryan Shrout


Haha, well I was only in Austin for about 36 hours. Also, I don't know who this is. :D

December 18, 2011 | 01:25 PM - Posted by pdjblum

You didn't happen to stay in the Westin or in the Aloft at the Domain, because I live in an apt in the Domain? Next time we have to hang out if you have time.

December 18, 2011 | 11:12 PM - Posted by Ryan Shrout

Nope, stayed close to AMD's offices. Don't remember the resort...

December 18, 2011 | 11:37 AM - Posted by Kristopher Kubicki (not verified)

Thanks for the write-up Ryan :)

December 18, 2011 | 11:12 PM - Posted by Anonymous (not verified)

Please, PLEASE label your f***ing axes.

December 18, 2011 | 11:13 PM - Posted by Ryan Shrout

Sorry, they are intentionally left vague...

December 19, 2011 | 09:16 AM - Posted by Kristopher Kubicki (not verified)

On the first graph, the y axis is an index and my apologies for it not being labeled. The second graph y axis should be units. X axis are all dates.

December 19, 2011 | 01:23 PM - Posted by Ryan Shrout

Thanks for chiming in Kris!

December 19, 2011 | 03:21 AM - Posted by Nilbog

Great analysis, thank you. I'm going to try and wait for a new HDD, its way too crazy, 1.5Tb Segate Barracuda is like 160$ now. I can wait, haha.

December 19, 2011 | 03:43 AM - Posted by Virtuous (not verified)

Fortunately most consumers are smart enough not to fall for the current price gouging.

December 19, 2011 | 01:23 PM - Posted by Ryan Shrout

Well, for some people if you need a hard drive, you NEED a hard drive.

December 21, 2011 | 11:13 PM - Posted by dagamer34 (not verified)

Yep, think of all the cloud services that need tons of hard drives. They can't just say "I'm gonna wait until hard drive prices return to normal in 2013 before I buy any more!"

December 23, 2011 | 02:30 AM - Posted by Anonymous (not verified)

Basic economics. Supply goes down, prices go up.

Price gouging is different. It applies to raising prices before supply goes down, as an attempt to profit. It's usually a term reserved for essential items such as food. Take for example gas prices rising across the country simply due to speculation that a hurricane may hit some area.

December 29, 2011 | 07:47 AM - Posted by dextrus

how does the performance of SSDs compare between intel and amd based systems?

March 5, 2012 | 05:01 AM - Posted by Prada Pas Cher (not verified)

Que vous soyez de formation Prada Pas Cher
de votre voix pour rejoindre les rangs des prada chaussure
chanteurs professionnels ou si vous sac prada
souhaitez cultiver votre talent amateur, il ya de nombreux aspects de chanter à prendre en considération.

January 17, 2013 | 01:08 AM - Posted by praack

ah love french- took german so don't understand any of it.

anyway- big issue is that SSD prices are still not dropping low enough that larger drives are in the hands of consumers easily.

120 ssd's only came to being affordable- but keeping that tidied up in an active system is a bit of a chore. usually over time you end up with about 400 gigs on the main drive- unless you are very studious in your maintenance

could probably get by with a 240 - but then the price issue comes up for ssd again.


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