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Impact of hard drive shortage to linger through 2013

December 9, 2011 06:00 AM ET

While it's difficult to predict how specific disk drive vendors will allocate supplies to computer system customers, manufacturers generally are likely to ensure that makers of enterprise systems are taken care of first, Rydning said.

Computer system manufacturers will also be high on the list, while consumers who buy disk drives at retail stores will be at the bottom, Rydning said.

In late November, hard-drive maker Seagate Technology stated that the Thailand floods would cause hard disk drive supplies to be significantly constrained for several quarters. For the quarter ending in December, the company said the industry will ship between 110 million and 120 million units.

According to IDC, this quarter's hard drive shipments will fall about 30% below demand. "We think the industry will ship about 120 million units, and demand was 175 million units, so you get the idea of the impact from the floods," Rydning said.

Market research firm IHS iSuppli said the drive shortage will cause PC shipments in the first quarter of 2012 to be about 3.8 million units lower than iSuppli had forecast in August.

"This will contribute to a reduced forecast for the whole of next year, with global PC shipments now expected to expand by only 6.8% in 2012, down from the previous outlook of 9.5% growth," iSuppli stated on Thursday.

ISuppli predicts that worldwide PC shipments in the first quarter of 2012 will amount to 84.2 million units; it had earlier pegged the number of first-quarter shipments at 88 million units.

In a response to a Computerworld inquiry, PC maker Dell said the complexity of the problem makes it difficult for the industry to pinpoint the magnitude or duration of hard drive shortages.

"Over the past two months, Dell has made strategic purchases of inventory and pulled in supply. The direct model has advantages in this environment," a spokesman stated in an email response. "We have teams working with impacted suppliers to manage our HDD supply chain and qualify new sources of supply. Our goal is to mitigate any impact to our customers and Dell."

HDD pricing

Because of the shortages, hard drive prices have skyrocketed over the past month, in some cases as much as 100%.

Despite concerns about rising HDD costs, there are indications that prices are starting to settle down.

According to Infoworld, HDD price tracking site the Camelegg chart, which tracks prices at Newegg, showed the Western Digital 2TB Caviar Green Western Digital20EARS hit a low of $69.99 just before the flood. A month later, on Nov. 10, it had soared to $249.99 -- an increase of 250%. Today the drive sells at Newegg for $162.99.

However, not all prices are on the downswing. For example, on PriceGrabber.com, the price of a Seagate Barracuda 1TB 7,200-rpm drive has climbed steadily from an average $140 in late Oct. to $192 today.

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

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