Global hard disk drive shortage expected due to Thailand flooding
Severe flooding triggered by the monsoon season in Thailand is expected to result in a worldwide shortage of hard disk drives that executives have predicted will continue for multiple quarters.
The most severely affected maker appears to be Western Digital, which was forced to close all its manufacturing facilities in the country and relocate much of their equipment to steer clear of rising flood waters. The company says that 60 percent of its parts are produced in Thailand compared with 40 percent for the industry average.
Toshiba Global Storage Technology has also reported that it has halted HDD production, though Seagate appeared to have been spared by pure chance. However, the company's reliance on suppliers for components means that its continued ability to produce disk drives is hardly a cut-and-dry affair. For instance, Nidec, which makes the motors used in HDDs, has been forced to close both production facilities in the country.
For now, higher HDD prices are expected in Q4 of 2011 as HDD customers scramble to increase their inventory. I would expect PC and laptop manufacturers to bear the brunt of the cost constraint, which will also hit Mac laptops and desktops.
The dismal outlook does not appear to extend into enterprise land however; at least one storage vendor indicated confidence in procuring HDDs. David Goulden, EMC's chief financial officer, told ZDNet Asia: "We tend to be our supplier's largest customer and get pretty good treatment when it comes to situations like this."