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Hard Drive Prices Up 150% In Less Than Two Months
zyzko writes "The Register reports that hard drive prices (lowest average unit prices) have rocketed 151% from October 1 to November 14th. The worst days have seen over 5% daily price increases. This is commonly attributed to the floods in Thailand, but there are concerns of artificial price fixing and suspicion that retailers or members of the supply channel are taking advantage of the situation."
The number varies when you break it down to individual drives, but it seems to be in the right ballpark. Anecdotally, the drive I picked up on Oct. 14th would cost me 135% more today. The flood waters in Thailand have partially receded, but aren't expected to be completely gone until early December. The damage to the country's economy and property is measured in the tens of billions.
They aren't up 150%.
They're up 400%.
Never thought 500 GB drives would come back into style...and yet they're what my friends are specc'ing into their machines these days.
I am John Hurt.
One advantage of all of this is that SSD drives will start to look more attractive price wise. To me, this is a good thing as people start purchasing SSDs the price will start coming down as the cost of components get more commoditised. I would not mind seeing spindle hard drives being a relic of the past.
"Be particularly skeptical when presented with evidence confirming what you already believe." -
This is the reverse situation to a new product hitting the market. When LCDs or Plasma screens first came out, they were basically unaffordable by anybody except the richest people and companies, now everybody has one.
This is the same situation in reverse - the production capacity fell and the demand needs to recalibrate the prices.
Of-course don't forget that there is a fixed cost associated with rebuilding the factories and all the new equipment and tools now are more expensive, given so few harddrive manufacturers even exist and all of the inflation that's rampant in the world.
If the price holds, it sends a message to rebuild the production and maybe add even more, clearly there is unfulfilled demand at lower prices.
You can't handle the truth.
I'm too lazy to look it up but the figure I remember seeing is that 25% of the world's hard drive manufacturing capacity has been impacted by the floods so the markup shouldn't be anything like 150%.
Why not? If demand is sufficiently inelastic, prices could go up 1000% if even 5% of the production capacity disappears.
Finally! A year of moderation! Ready for 2019?
prices are up 300%. I work at a B2B-reseller and the 1TB Western Digital Caviar Green which was 0.05€/GB in September is now up to 0.16€/GB. Other drives are similar. Some drives have even seen 400%.
Not going to happen.
Last I checked, there isn't much overlap for HD / SSD manufacturers. If HD prices remain high, SSD manufacturers will have the advantage.
Which means the HD manufacturers may go the way of the dinosaur in a few years.
I am John Hurt.
Actually, I think demand is very elastic at this point. It spiked like crazy over the last few weeks as people scrambled to buy as many drives as they could lay their hands on before all of the vendors jacked their prices. The high inflation caused a run on the existing supply. Now demand is going to plunge as people who were adding capacity, just because they could, stop buying drives. But I don't expect prices to come down even as the supply recovers. Insurance will pay to rebuild (and relocate if they're smart) the factories but we'll have inflated prices for a long time.
Finally someone who isn't an economic ignoramus in 0123456.
As for billcopc's comment that those who built their factories on flood plains should bear the cost, it is incredible to me that he thinks they aren't bearing a cost for the destruction of their factories and property. Also, they obviously built their factories there for a reason, undoubtedly having to do with costs; consumers have been reaping the benefits of that in lower prices.
Well, hard drives are commodities, like orange juice, gas, oil, etc.
Prices are inflated now simply because everyone's got the "OMG I NEED A DRIVE NOW!!!" fever. Then again, drives today aren't any more expensive than they were just a year ago.
So if you have no need for a spare hard drive, don't be a sucker and buy now. If you find a sale, great, if not, hold off.
And yes, drive supplies will rebound because of one fact - a 2TB spinning rust costs way less than a 2TB SSD, and since drives are going 3TB+, I don't see SSDs catching up until drive size expansion slows below Moore's law. (SSD's fundamental capacity is driven by Moore's law - double the transistors in 18 months - double the capacity - SLC or MLC).
I'm guessing everyone's in a frenzy, but they'll recover in a few months and if it's been sitting on the shelf the whole time while you "stocked up", you'll look silly.
In short - buy if you really need it (and take notice in that drive prices really aren't sky high - they're just where they were last year or the year before). If you don't, just wait it out.
We thought we'd be stuck with $150 barrels of oil. They dropped under half that a year later.
Lefties prefer option 1, where they keep prices artificially low and then complain when there's nothing available to buy. Sane people prefer option 2.
I was with you up until that gem. Your economic statement is sound, but your generalization falls somewhere short of enlightened thought.
I don't hate gay people and think abstinence-only education is a terrible idea. That typically makes me one of the "lefties." Believe it or not, I still own and operate a successful small business and am supportive of the free market in most contexts.
Or by March 2012, tops.
Personally, I'd rather take the estimates of people doing their best to fix the problem...
Plant managers at Nidec Corp. (6594), which makes motors for disk drives and also has a factory at Rajana, decided not to wait for the water to subside at its seven flooded factories. According to company spokesman Masashiro Nagayasu, they cut a hole in the roof of the Rajana factory, sent divers into the toxin-laden waters to unbolt some heavy equipment, and lifted it onto waiting boats. Some of the equipment is now being used in Nidec factories in China and the Philippines.
...than of CEOs like Seagate's Stephen Luczo who are gleefully rubbing their hands together at the price hike, predicting a year-long shortage of hard-drives.
"People are going to appreciate the complexity of this business," he says.
Mit der Dummheit kämpfen Götter selbst vergebens
Is any of this surprising??? A caribou in Alaska passes gas and ALL gas prices jump forty cents in the US (of course there's no price fixing or collusion going on.) In 2000 Enron screwed with the supply of electricity to the western US, precipitating the Dot Com crash (the tech bubble sustained the collapse, but it was the rolling black outs that started massive business failures.) Enron's affiliates were able to bump prices to mind numbing levels, then got caught with internal memos laughing about how they reamed California for billions. An article comes out that oat bran reduces cholesterol and suddenly a bag of granola needs to be stored in a bank deposit box.
We are haunted daily by "Whatever the market will bear...", which is just code for "The piggies are at the trough and if I don't gouge out a piece for myself I'll miss out on the feeding frenzy." Sadly it has become the norm. Our society has put profit ahead of everything, ahead of dignity, compassion, even sanity. We've been caught in a terrible race to the bottom. This is why we debate about the sane limits to gutting economies and ecosystems. Because somebody, somewhere isn't yet done raping what remains of some vital resource.
Perhaps its time we acknowledged the darker aspects of primate behavior and started designing our society to limit the damage they can do. Checks and balances were expressly designed into our government to limit the dangers of concentrated power. Sadly we've allowed power to concentrate elsewhere and the wisdom of our founding fathers now ring louder than ever before. Corporation is the failure and its time to put things right. The price of drives is just a blip on a landscape of unbridled greed and avarice destroying the very things that make life worth living.
Although I don't have the specific knowledge of WDC and Seagate contracts you profess, many/most contracts have "outs" for act-of-god situations, which would apply here.
Yes, but to invoke "force majeure" - as I know it best - you must be truly unable to supply. You can't just bail on your OEM contracts because it'd be more profitable to sell them on the open market, so the open market has to absorb the whole shortage first and only then, if you're still unable to supply the OEM market can you invoke it. The OEMs would probably also have rights to a delayed fulfillment so any backlog must be cleared first before they can supply the rest of the market. So while what you say is true, it doesn't really change anything the GP said. It really only shields the HDD manufacturers from liability due to breach of contract.
Live today, because you never know what tomorrow brings