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Hard Drive Prices Slide As Thai Flood Aftermath Subsides
New submitter yeszomgpony writes "For the first time since the Thailand flooding, hard drive prices are finally starting to decrease. The price jump was kicked off in October when drive inventory levels plummeted 90% in less than a week. From the article: 'Over the past few weeks, hard drive prices have leveled off and have begun to drop slowly, according to Dynamite's data. "For first time, less than week after Western Digital's first [fabrication plant] went back on line, drive inventory began increasing at both distributors and ecommerce sites, and index prices began coming down a little too," Kubicki said. IDC has predicted that hard disk drive supply shortages in the wake of Thailand flooding would affect consumers, computer system manufacturers and corporate IT shops into 2013.'"
Both are sliding
Sure seems like there's a shortage... I asked around whether anyone needed a few of my old ass hard drives on one of the local (German) hardware forums, and received a trade of a slightly castrated Core 2 Duo, 4 gigs of RAM and an ASUS mainboard for just a 500gig 3.5" SATA drive and an 80gigger notebook drive... both well used, of course. A few weeks ago, this wouldn't have been possible, with the hard drives worth pennies and the other hardware worth 40-50€.
Glad to hear the shortage is coming to an end though... I really need to upgrade my NAS. Last time I did that, 1TB drives were in the sweet spot... getting a bit full.
This often happens when a process goes off line for a time. It also normally works itself out after a few months.
I'll be waiting a few months myself.
hmmn seems conveniently timed to be more expensive while people are buying Christmas presents and they go back to regular pricing after the Xmas shopping rush, no there is no taking advantage disaster at all here to price gouge the consumer
---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
I think I'll wait a while until the processing hardware is working perfectly, the power is stable, the factory is fully purged of airborne particulates, etc. Until then I'll let someone else do the QC testing.
Wait wait wait... so you are telling me
Event...
Inflate fears based on event...
????
Profit
Holy shit... I could make billions! Quick, someone turn off a pipeline somewhere....
Goes to prove yet again how the "free market", that weird beast so idolized by economists, is such a fickle creature. Cause after over several months underwater, there is NO way you are gonna get a clean room facility up to snuff & speed in a matter of days. Of course, now that the excuse is over, all the hoarding speculators are trembling in fear of getting stuck with their huge stockpile and will start to desperately flood the market.
Goes to prove yet again how the "free market", that weird beast so idolized by economists, is such a fickle creature. Cause after over several months underwater, there is NO way you are gonna get a clean room facility up to snuff & speed in a matter of days. Of course, now that the excuse is over, all the hoarding speculators are trembling in fear of getting stuck with their huge stockpile and will start to desperately flood the market.
So in other words, the free market will function in exactly the way it's supposed to
Someone should do a article or investigation into all the obscure places our hardware comes from, especially concentrations where most of one type comes from a small area.
We only ever seem to hear about these places when something goes wrong.
Remember that time in the '90s when a Taiwanese RAM factory caught fire, and it turned out to be a big chunk of world RAM output? Sent prices spiking for a while.
Conversely, it's surprising how little the Japanese tsunami affected the tech world. I guess their industries were concentrated further south.
It does show up on google at around $100 (CDW). When you click on the link it's really $174. Newegg is currently $162. Think I'll wait awhile.
/. disks are getting full.
Slashdot, fix the reply notifications... You won't get away with it...
Ideally nothing. To suggest that the free market has an ideal or purpose or positive outcome short or long term is as foolish as to suggest that intelligent design underlies evolution and guides it benevolently.
The free market, for whatever necessarily restricted implementation of free market exists today, is a game which you win if you play well. Other people may benefit, or they may be unaffected, or they may have their enjoyment of life severely damaged. The only thing we can guarantee is that the winners usually tell everyone else that their win has been for everyone else's good too.
Great. We should get the government to control prices. I can't see how that could go wrong.
This news reveals an important piece: The is no real redundancy in the suppliers when in comes to important parts of todays' devices. I often see* that the hard disk array suppliers keep buying them from a couple of asian outfits thinking they will be safe hands. But the asian hardware vendors themselves buy/order from the same manufacturer of platters/board/NAND creating a single point of failure scenario.
There should be a clear visibility of the supply chain of not just the end/whole product but also the key components of it. In another story, heard that shipping of Sonys' SEL50F18 lenses for NEX cameras are pushed to Mar'12 after users payed for it, for the same reason.
* working for a big storage co.
PS: Misread Flood as Food.
I wonder why Seagate chose to slash their warranty even though its plants weren't affected by the floods.
Exactly, a perspective. Let me explain what that means:
In this huge world with 7 billion people, every 3 minutes, about 600 die. (On average about 3 per second). And our population growth is so fast that the 600 dead had been replaced (sorry for the dry factual choice of words) before the floods even hit the news. ... But the harddrive problem affects the world, albeit in a modest way, for months.
So yeah, it seems the editors really do have a sense of perspective. Maybe you prefer a more emotional perspective... but if you want to mourn every couple of hundred people that die, you'd better empty your agenda. It's a full time job.
Riding round on horses terrorizing people?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
But only for the oooh shiny crowd. I simply held off buying any hard drives. Would I have liked to expand capacity? yes. Would I have liked to buy 12 new machines? yes.
Did I kill people or lose money because I did not? no.
Honestly, the price jump was only because of idiots that rushed out and bought drives when they heard of a possible "shortage" and thus created a shortage.
Do not look at laser with remaining good eye.
Cause after over several months underwater, there is NO way you are gonna get a clean room facility up to snuff & speed in a matter of days.
Not days. Restoring the WD factory took about 6 weeks. It's still a bit spurious, I'll give you that.
And that's what it did. Initially, the demand curve didn't shift, but the supply took a huge hit. The price increase allowed the market to adjust, and eventually (quite quickly, apparently) subsided as capacity has been (partially at least) recovered (perhaps using existing capacity with reduced QC, as evidenced by the warranty cut...) and substitute products have been sought (some products may be forgoing HDs in favor of much smaller but still adequate SSDs, for instance).
This is exactly how the market is supposed to work. It's not supposed to be constantly at some steady-state "ideal" price. That's how planned economies work, and results in either or both of shortages and waste.
The only evidence of anything like market failure is the warranty cut, that cut across all manufacturers. One would've expected someone to hold out and become the "quality" producer. But even that is a stretch as the warranties were not cut across all product lines for all manufacturers.
Can you be Even More Awesome?!
So - How can you stop boom and bust - the simplest way is to flood the market, and not let anyone know! Good luck with that strategy.
Alternatively, you can try lying a lot, and hoping no one notices (its called communism). Doesn't work very well in practice.
Sent from my ASR33 using ASCII
From the article:
Data from DRAMeXchange also showed that rush orders for SSDs increased after the Thailand flooding disrupted hard disk drive supplies.
According to DRAMeXchange, a research division of TrendForce, rush orders for SSDs rose even as shipments of end-market products, including PCs, smartphones and tablet PCs, remained slugish because of slow economic conditions.
Despite SSDs not being an exact replacement for spinning rust, it looks like the HD shortage is indeed having the predicted effects on the SSD market.
What can I say, market is a price discovery mechanism and this truth still holds, even though so many in those previous stories disagreed because they completely miss the understanding of most basic economic principles.
Price discovery and profit are market principles that send signals to manufacturers to increase or decrease production, and the profit is the engine of progress - goods is what people want and are willing to trade their time (money) for them, thus the more profit one is making by supplying people with goods the more this indicates that the business is sound.
Of-course in a free market (free of government regulations), the absence of government regulations prevents possibility of a monopoly and thus the distribution becomes more and more efficient with prices falling and quality increasing.
You can't handle the truth.
Were the actual plants flooded? Or was it a lack of power(impassable roads, etc.) due to the flooding that caused the shutdown?
Based on the photo in this NYT article it certainly looks like the WD buildings themselves were flooded.
A shortage doesn't have to be that severe to affect prices. If the manufacturer says "hey, by the way, you won't be getting another delivery until December," the distributor does some math and raises prices to make sure they don't run out before December. The market worked the way it was supposed to: prices went up and the demand went down. The number of boxes on the shelf are meaningless; it is the rate at which they are sold and replenished that is meaningful.
Honestly, the price jump was only because of idiots that rushed out and bought drives when they heard of a possible "shortage" and thus created a shortage.
Sure, because the "shortage" is just a con made by wall street. Are you part of the occupy movement or something? Of course there is a rush of people overreacting too, but it's not like the floods down in Thailand were imaginary. HDD production is way down and with long term contracts with OEMs taking priority the rest of the market was going to get squeezed badly. Everybody that's looked at a price-quantity curve knows that when supply goes way down like that the prices go up. Yes, people that panic buy to be on the safe side amplify it but there wasn't that much in the channel to raid before webshops figured it was a rush and raised prices. By the time "everyone" knows a shortage is coming it's too late to get a good deal already.
Live today, because you never know what tomorrow brings
With the current trend of a few large companies controlling the market it is getting harder and harder to find markets where the free market model still applies.
This isn't a current trend, it's always been the trend: in any market, as the market matures, the number of suppliers shrinks through attrition and mergers, until there's only a handful of really big companies controlling the whole market. Just look at the automotive market for example: in the USA alone, there used to be dozens of car makers in the early 20th Century, but by 1970 it had shrunk down to 4 main players; it only opened up again when more foreign makers entered the market, namely the Japanese.
Appliances: there's only 3 or so American appliance makers (Whirlpool, GE, Maytag), although recently we've gotten more foreign brands (Samsung, LG, Bosch).
This is just the natural order of things: as a market matures, the players buy each other out or go out of business, until you're left with a few large competitors. Sometimes a monopoly results (or close, with one player being the dominant competitor with a large majority of the marketshare). This is why government regulation is necessary at this stage, to "keep the playing field level" and prevent entrenched players from keeping newer, smaller competitors out of the market the way they did with Tucker cars.
Allowing a free market with little or no regulation is great when a market is immature and there's lots of players and competition (and there's few or no health or safety issues to worry about, like with food); but after a while it becomes necessary or else you get a situation like Microsoft circa 2000, bullying everyone and stifling innovation.
Government should almost never control prices, except in the case of utility monopolies for instance. However, government's responsibility is to provide regulation such that, in most markets (utilities being an obvious exception), no monopoly ever develops, and a healthy number of competitors always exists. The government can do this by preventing mergers. The more competitors there are in a market, the freer that market is, and the better off consumers are (within reason of course, there's a law of diminishing returns here--3 competitors is much better than 2, 5 is better than 3, 10 is better than 5, but 1000 isn't much better than 100, if at all).
It's too bad that only the European governments want to bother providing proper regulation these days, as Americans seem to be perfectly happy with abusive monopolies and lack of consumer choice.