Western Digital Expects HDD Prices to Return to Pre-Flood Levels in 2013, But Analysts Don't

Brad Chacos

Just in case you haven't gotten the memo yet: HDD prices haven't returned to pre-flood levels, and don't expect them to anytime soon. Don't take our word for it; that information's coming straight from the horse's mouth, as a European sales director for Western Digital -- one of the two big HDD manufacturers -- recently said that prices won't drop that low until next year.

Sure, the production facilities are fully up and running, but WD's Ian Keene says that the company still needs to recoup some of the massive costs associated with battling the devastating Thailand floods.

"There are a lot of added costs right now," he told The Register . "WD spent a lot of money on capital damage, running (under-utilised) factories that still paid people and mitigating risks of (future) floods." He also says that shifting some of the company's manufacturing capabilities to Malaysia in response to the floods has also added additional costs.

Industry analysts at IHS iSuppli aren't nearly as optimistic. In a June report , iSuppli said it doesn't expect prices to drop to pre-flood levels until 2014. The firm notes that just two manufacturers, Western Digital and Seagate, control over 85 percent of the HDD market after a series of mega-mergers in late 2011 -- which gives them the ability to keep prices skewed towards higher levels.

iSuppli analysts also point out that during the height of the floods, OEMs signed long-term agreements with HDD makers in order to ensure availability, but those agreements locked hard drive prices in at rates that are around 20 percent higher than pre-flood levels.

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