Thailand Flood Consumers Face Hard Drive Price Hikes

Floods in Thailand are wreaking havoc on manufacturers of hard disk drives.

While HDD vendors are expected to keep computer makers -- their largest customers -- supplied with inventory, the consumer retail market is likely to be hit by shortages and price increases, analysts said.

Two research firms, IHS iSuppli and IDC, have predicted that the overall shortage due to the flooding will reach 25% to 28% over the next six months.

Western Digital, the largest hard drive producer, will likely be hurt the most: IDC predicted that up to 75% of its production lines will be temporarily shut down. Western Digital and Toshiba have already announced temporary shutdowns of their Thailand factories.

For its part, iSuppli said fourth-quarter hard drive shipments will drop by 28%, to 125 million units, from 173 million units in the third quarter.

Consumers should expect fourth-quarter prices to be at least 30% higher than third-quarter prices.

"You'll start to see PC makers increase prices for some products," said John Rydning, an IDC analyst. "So, indirectly, consumers will face some higher prices because of higher HDD prices."

Prices on retail sites have already risen -- and in some cases even doubled.

Analysts predicted that the HDD component in shortest supply will be the slider; it's the block onto which the record and playback mechanism is mounted.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

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