Thailand floods mean 3.8 million fewer PCs to ship in Q1 2012

But a hard drive surplus is possible by the end of next year, IHS iSuppli says

The monsoonal flooding in Thailand that closed down a dozen or more hard drive manufacturing and supply plants will mean millions of fewer PC shipments in the first quarter of 2012.

According to market research firm IHS iSuppli, the floods will result in a 3.8 million-unit shortfall compared to the previous IHS forecast issued in August.

At the time, IHS was expecting 88 million unit shipments in the first quarter of 2012; Now, it expects 84.2 million PC units will ship. The new forecast would represent an 11.6% sequential decline from 95.3 million units shipped in the fourth quarter of 2011.

PC shipments
PC shipments for 2012

To date, the floods, which began in late August, have caused $1.4 billion in damage, according to figures from the World Bank.

The additional shortfall will contribute to an already reduced PC shipment forecast for the whole of next year. Globally, PC shipments are now expected to expand by only 6.8% in 2012. Earlier projections had pegged shipment growth at 9.5%.

Total PC unit shipments in 2012 are forecast to total 376 million, compared to the previous prediction of 399 million. IHS is blaming the 2012 shipment change on 30% fewer hard disk drives (HDDs), the worldwide economic slowdown and rising competition from media tablets.

"The PC supply chain says it has sufficient HDD inventory for the fourth quarter of 2011. However, those stockpiles will run out in the first quarter of 2012, impacting PC production during that period," Matthew Wilkins, senior principal analyst for compute platforms for IHS, said in a statement.

In contrast to data from other research firms that envision shortages persisting through 2013, IHS predicted that by the end of next year there could be a surplus of HDDs. The firm attributed the surplus to a combination of manufacturing facilities in Thailand returning to full production and manufacturers shifting production and increasing volumes outside the country.

While PC shipments typically decrease after the peak holiday-selling season, the drop in 2012 will be far sharper than the 6% historical average decline.

The bulk in reduction in shipments will affect laptops, which have been most heavily affected by the HDD shortage. Notebook PC shipments in 2012 now are expected to rise by 10.1%, off from the previous forecast growth rate of 13.8%.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed . His e-mail address is lmearian@computerworld.com.

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