Current HDD prices in line with pre-recession levels
The hard drive industry was hit particularly hard by the 2011 floods in Thailand, which is the second biggest producer of hard drives behind China. The devastating deluge was accompanied by a sharp increase in hard drive prices, with the average selling price for HDDs shooting up 28 percent to reach $66 in Q4 2011 (Q2 FY2012). Although a return to pre-flood prices does not seem likely in the immediate future, things aren’t nearly as bad as they were an year ago.
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.
Western Digital's hard drive operations in Thailand spent part of the company's second fiscal quarter ended December 30, 2011 waterlogged after severe flooding ravaged the area, but if it was time to sink or swim, WD chose the latter. Remarkably, the hard drive maker still managed to ship 28.5 million HDD units during its second fiscal quarter, pulling in $2 billion in revenue and profiting $145 million.
Don't hold your breath waiting for hard drive prices to stabilize, not unless your lungs are large enough to sustain you for up to 12 months. It's been several months since flooding in Thailand left hard drive manufacturing equipment submerged in water, and as we kick off 2012, Hitachi warns the global hard drive industry won't completely recover until the end of 2012.
Effects of the hard drive shortage resulting from major flooding in Thailand earlier this year continue to reverberate throughout the technology industry. Even Intel, the world's largest chip maker, isn't immune to to it all, and in fact the Santa Clara outfit warned today that its fourth quarter results are expected to be below the company's previous outlook.