Hard Drive prices to remain inflated in 2012

By on February 13, 2012
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Recovery from Thailand floods still slow.

In a recent update by research firm IHS, their analysis on the hard drive industry that was badly affected by flooding in Thailand last year suggests that prices will remain inflated throughout this year.

The shipment for HDD in Q4 2011 was just 124 million, down by 26% compared to the same time period in the year before. This resulted in price inflation for HDDs by a global average of at least 28%; more in certain countries. While IHS expects the HDD prices to fall by 3% in the first quarter of this year, and a further 9% in the second quarter, the overall prices will still remain above 2011. However, production is expected to stabilize by the 3rd quarter.

The recovery of global HDD manufacturing has begun and will continue during each quarter of 2012,” said Fang Zhang, a storage analyst for IHS, in a statement. “However, the recovery will be prolonged for at least two more quarters, as supply constraints keep unit shipments from climbing on an annual basis until third quarter. Meanwhile, HDD prices will remain inflated and inventories will continue to be depleted, showing that demand is exceeding supply. Supply and demand should return to balance by the end of the third quarter.”

Unfortunately because many OEMs have already locked into yearly contracts with hard drive manufacturers, price may not go down back to normal, even by the fourth quarter of 2012. Furthermore, the merger between Western Digital & Hitachi as well as Seagate & Samsung will help maintain the higher than average prices.

All of this translates to expensive hard drive upgrade options for laptops and desktops, while DIY hard drive upgrades won’t be as cheap as before.


About

From auditing to editing, I now test and analyze the latest gadgets and games instead of the latest financial statements. Both jobs are equally intense and rewarding. When I'm not burning up hardware in the name of science, you'll find me nuking in DOTA 2 or engineering in TF2.

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