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HDD Price Update: How the Thai Floods Have Affected Prices, 3 Months Later
New submitter jjslash writes "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. TechSpot has monitored a number of mobile and desktop HDDs to get a better overview of how the situation has developed in the last three months."
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
"and" would be better as "but" implies that there's some sort of twist.
That is what we are dealing with. From HDs to gas prices.
Currently 10 cents per GB, on average, as opposed to this time 1 quarter ago when you were looking at 5 cents per GB.
Thirty four characters live here.
OMFG that means for the same price I will only be able to stash half the garbage I will never consume!!!!
I see folks are expecting prices to get better, but just watch...
The initial price shock from speculation, panic-buying and hoarding may be coming down somewhat, but as the article alludes towards the end, the real impact might last throughout this year. There haven't been actual shortages on that many products so far, and when real shortages show up prices could stay high or go higher even with people cutting down as much as they can on drive purchases. (I know several popular and/or performance drives have sold out at PC makers, especially on their build-your-own websites, but most products never ran completely dry.)
Not to mention that while vendors have a lot of tactics for dealing with shortages, from back-stock to supply contract clauses entitling them to extra shipments of already manufactured inventory during crises, none of those tricks can't make new hard drives appear out of nowhere. The wiggle room such tactics enable will be drying up about now. Eventually even commodity drives could feel the squeeze as supplies on more and more drives threaten to run out entirely, despite the high prices. Because there's a lot of pent-up demand and it sounds like many of those plants still aren't nearing full capacity again.
The Thai floods also disrupted the supply chain for digital cameras. It would be interesting to know how things are doing on that front.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Prices are still high, but not as much as they were at the peak last November. Instead of 80-190% above the pre-flood prices, they are now 60-90% up.
This probably should've been part of the article summary.
I think lots of people don't understand what happened with Newegg and other retailers. As someone explained it to me, a drive maker like WD has two kinds of customers:
1) big systems integrators like Lenovo, Dell, HP, etc., who order 100K drives at a time or more
2) Smaller customers (e.g. resellers) like Newegg, who order maybe 1k drives at a time. If someone wants just 5 drives they have to buy from a distributor or retailer like Newegg.
The very big customers will order their 100k drives at some preagreed price, delivered over (say) a 3-6 month interval per their production schedules. WD also plans its own production around such large orders. If they get (say) 1 million drives worth of such orders for 1Q2012, they'll (normally) set up their production to make (say) 1.3 million drives, deliver 1 million of them per the pre-agreed contracts, and put 0.3 million on the shelf for to fulfill "spot market" orders from places like Newegg. Depending on market conditions and what the competition is doing, the spot price will fluctuate above or sometimes below what the big OEM's pay.
When the Thai floods hit, production was cut from (say) 1.3 million to 0.9 million. There was no way to fulfill the agreed contracts, understandable due to the disaster, but they had to make the best effort they could, which meant hand ALL their drives over to OEM's while the likes of Newegg got nothing. So the prices of integrated systems actually didn't jump that much, but spot prices skyrocketed.
Now that we're a few months into the drama, the OEM's are in a new ordering cycle, they get to pay higher prices too, but WD gets to again allocate some drives to spot inventory. So we'll be seeing higher prices from Dell over the coming months, but some relief on the Newegg side (though the prices will still be higher than before, until around 3Q or 4Q from what I keep hearing).
Western Digital and Toshiba had factories in the flood zones whereas Seagate was mainly affected by the resulting supply constraints from business partners who were forced to halt production of related components. Among those was Nidec, which produces ~70% of the world's hard drive spindle motors.
Huh? The manufacturers aren't legally forbidden from selling you 3 drives if that's what they want to do. They just don't want to deal with running a retail operation. It's just like if you call a shoe manufacturer like Nike and say you want to buy a pair of running shoes. They will refer you to a shoe store, since they don't want to deal with smaller quantities.
Also remember that the OEM contracts were significant in the above picture because they were agreed BEFORE the floods, and locked in pre-flood prices that stayed in force for months after the flood. So even if WD were willing to sell you 1-2 drives directly, you would have had to order before the flood to get the low price. After the flood, if they had inventory to sell you that hadn't already been committed to other customers, they would have charged market prices the same as Newegg did.
I live in Thailand and ever since the floods, it has been used as an excuse to keep prices up. Examples of this would be beer, eggs, maama (think instant noodles) and also Hard Drives!
If you've ever lived here, you know people try to outsmart everyone and an example of this would be claiming shortages of hard drives is keep prices high even known their supply chain in Ayuthaya (where most of this shit comes from) has been bone dry and their factories operating at capacity for at least 6 - 8 weeks.
Mind you, when I go to my IT Square near where I live, only a few days ago Hard Drive prices are relatively back to normal, yet overseas, are still super expensive compared to normal. Also Nikon cameras and glass are normal prices here (most DX DSLR's and glass are made in Ayuthaya) and again OS it's still more expensive than normal.
This is a technical site for geeks and nerds, we simply don't need to cover that side of the story, it's been done elsewhere. The reality is, as nerds this is the important part to us. You can say we're emotionless or cruel or some other such word but those are the facts, it's a technical site, with technical news. If you want coverage of the other impact you need to look elsewhere.
I think that's needlessly critical. Of course there are great human disasters which don't fall under the umbrella of /. Just because this happened to be one which also has a major affect on the tech industry, doesn't mean the humane part of this is any less tragic. Still, people come to /. for tech news, and this is an interesting analysis on how the price of the drives have been affected, and that is what /. should report.
Lumping everybody together as basement-dwelling cold-hearted bastards who only care about cheap hardware is just as narrow-minded as you claim people reporting/reading this are. In fact, from my experience it seems that people reading /. are often more aware of international social issues than average.
Among those was Nidec, which produces ~70% of the world's hard drive spindle motors.
Single supplier, but not single site. Their web site says they have plants for spindle motors in Thailand, China, Indonesia, The Philippines and Vietnam. True, the 6 plants listed are all in Thailand but the implication that 70% of the drive motors are made in Thailand is false.
Live today, because you never know what tomorrow brings
It's about buying smart. Instead of buying recertified drives, go for drives that really like the water like Barracudas and Caviar.
What? I agree that Slashdot sometimes ignores stuff that matters a lot, but this was covered, and there were a bunch of followup posts on Slashdot too.
If you are suggesting that people on Slashdot don't know about this event, you are delusional.
Also, I'm not going to take a bike ride in -26C, but if you want to take one in your cozy first world climate, be my guest.
"Besides, arent hard disk prices saner in Australia?"
Yes but their drives wont work here. the platters spin the other direction.
Do not look at laser with remaining good eye.
So I suppose a Quantum Fireball is out of the question then?
For all intensive porpoises your a bunch of rediculous loosers