High hard drive to continue through 2014

[NJC]

To start:

Quote:
Hard drive prices are going to remain high for another two years according to market research company IHS iSuppli. After the flooding in Thailand last year, hitting many hard drive manufacturing plants and causing a demand/supply imbalance, prices of hard drives leapt 28 per cent. Production levels are expected to reach pre-flood levels by Q3 2012.

Average selling prices (ASPs) remained at $66 for Q1 2012, the same figure as in Q4 2011. In Q2 2012 the ASP figure is estimated to be $65. Before the floods in Thailand the ASP was $51. The floods caused a 29 per cent drop in production and a closely corresponding 28 per cent price increase.

28% seems WAY off - something is not adding up. Drive prices seem about 50-100% over 2010/2011.

Quote:
One more factor in firmness of the prices is that there are now fewer competitors in the HDD manufacturing business. IHS iSuppli storage systems analyst Fang Zhang said the suppliers act like an oligarchy. He said “With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 per cent of HDD market share in the first quarter 2012. This was up from 62 percent in the third quarter of 2011, before the mergers. The concentration of market share has resulted in an oligarchy where the top players can control pricing and are able to keep ASPs at a relatively high level.”

Right. With SSD's imminence, it's a fading (albeit slowly) business model - so they are making $$$ while they can. But nothing anti-competitive about having only 2 players in the market controlling prices??

http://hexus.net/business/news/components/40609-hard-drive-prices-remain-pre-flood-levels-2014/

 

[tommygunn]

I see a 2tb WD external at New Egg for $109 today, so it isn't that high. Dell had the same deal yesterday with Seagate.

 

[DemoFly]

The HDD crisis was fake, WD and Seagate managed to sell the same amount of units as the previous year.

http://news.softpedia.com/news/HDD-Crisi...ts-266676.shtml

It's just like oil companies, you can't let a "natural disaster" go to waste.

 

[NJC]

Originally Posted By: tommygunn
I see a 2tb WD external at New Egg for $109 today, so it isn't that high. Dell had the same deal yesterday with Seagate.

I have a screeshot from bestdirect.ca of a WD 500GB blue caviar $40 in Oct 2010. Price as of June 2012 is $78.

I also purchased a 1TB blue caviar in the last few yrs at $59. It is now $96.

I think we're getting hosed - and there will not be relief until SSD prices are lowered.

 

[NJC]

This zdnet article claims the following:
Quote:
HDD buyers typically qualify 2 drives for their products so they’ll have options if one supplier has a problem. As supply improves Seagate and WD will soon be battling for multi-million unit orders as they always have.

[...]

Drive prices will largely be back to normal by year-end. Seagate and WD won’t like it, but they’ll just have to deal.

In the long run drive vendors don’t want the kind of supply disruption they’ve just had. Sure, the extra profits are very nice, but you don’t want your customers to start searching for alternatives to your product.

We'll see if prices have returned to "normal" at year's end. As for not wanting customers to start searching for alternatives, they're aren't any viable price alternatives.

http://www.zdnet.com/blog/storage/are-high-hard-drive-prices-the-new-normal/1679

 

[crw]

There was nothing fake about the Thailand floods. My company is still trying to recover from them. Ultimately, the facility we had there was under 8 feet of water for months... then it was closed and that production had to be moved to another country!

If some players in the market fared better than others, it's simply because the floods didn't hit them so hard. Higher prices (for a time) are the natural result. Some people look for a conspiracy in everything... but the reality is that you cannot close one facility and open another "on a dime". This sort of recovery takes time.

 

[PandaBear]

The production level might be the same, but they are probably trimming the lower end smaller capacity drives, and judging by the amount of computers that would have been sold if there were more drives, there is an impact to the market and it is real.

Remember, most of the drives are sold to OEM for new computer built, not to Frys or Best Buys for your upgrade need. These retailers are just dumping ground for excess productions and spot market. When there's a shortage or overproduction (or disqualification from major OEM) there will be huge swing in retail market.

 

[scurvy]

Originally Posted By: crw
There was nothing fake about the Thailand floods. My company is still trying to recover from them. Ultimately, the facility we had there was under 8 feet of water for months...


Agreed, wholeheartedly.

My employer recently opened a second manufacturing line at an existing plant near Bangkok - I was heavily involved in tooling design for this second line. In late October, we were circulated pictures and information about the flood's effect on the plant - workers had to be rescued by boat and eventually the plant was under 4 meters of water. The entire plant full of machinery (at least $15M worth) was written off and will have to be replaced, which is still ongoing.

There was nothing fake about the floods. What the hard drive market experienced is simple microeconomics, supply & demand.

 

[rjundi]

I wonder if the emergence of tables (eg iPad) took the PC makers by surprise and HDD makers leaving a glut/dumping ground back in 2010/2011.

Very few folks I know have purchased new laptops/workstations.

My 3yr+ old T500 I did get a SSD and 8GB ram for and it works well enough for work. I am hourly anyway so faster computer is not a major life changer for myself.

I still on the fence whether to get a iPad or not for general use. Chrome works so well on an older machine.