IHS iSuppli: Thailand Floods Still Having an Impact on HDD Manufacturing

Paul Lilly

Now is not the time to be dealing with a faulty hard drive needing to be replaced, nor has it been for the past several months. That's because severe floods in Thailand in late 2011 left HDD manufacturers in bad shape, ultimately leading to a shortage of hard drives and higher costs for consumers. Relief is coming, but not for at least a couple more quarters, according to IHS iSuppli.

"The recovery of global HDD manufacturing has begun and will continue during each quarter of 2012," noted Fang Zhang , storage analyst for IHS. "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."

IHS iSuppli predicts HDD shipments in the first quarter of 2012 will go up by 13 percent, compared to a 29 percent decline in the fourth quarter of 2011. After that, IHS iSuppli's crystal ball shows HDD shipments increasing by another 14 percent in the second quarter, 14 percent in the third quarter, and by 4 percent in the fourth.

Even as HDD shipments move towards pre-flood levels, prices will remain comparatively high throughout 2012, IHS iSuppli says. The average selling price (ASP) for HDDs shot up by 28 percent in the fourth quarter of 2011 and will only decline by 3 percent in Q1 2012 and 9 percent in Q2.

If you're looking for a silver lining here, it's that it makes more sense than ever to invest in a solid state drive, which are still comparatively expensive (per gigabyte), but coming down in price and going up in performance.

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