Hard drive shortage pushing up PC prices

Thailand floods hit manufacture of hard drives, pushing up prices for internal and external drives and hitting PC makers

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Inside a computer hard drive. Flooding in Thailand means only two-thirds of demand can be met this quarter. Photograph: Scenics & Science/Alamy


If you want an external hard drive, best buy it quickly. Prices of hard drives are being pushed up rapidly as manufacturers say that they will only be able to meet two-thirds of demand in this quarter, and shortages will continue into 2012 – and possibly beyond.

The constraints have been caused by the deadly flooding in Thailand, where hundreds of people died as large areas were inundated. Industrial facilities, including those where many of the assemblies for the world's output of hard drives are made, were seriously affected.

Prices of hard drives have already begun rising dramatically, and PC makers say they will pass the cost on to consumers. Acer says that the price of its PCs could rise by at least 2-3%. Dell and Asus are also reported to be considering price rises on their PCs.

That could create a significant opportunity for manufacturers of solid state drives (SSDs), which rely on Flash memory and have no moving parts. Prices of Flash storage have been dropping steadily; until now the cost of magnetic storage has also been falling, but this marks the first time in the past decade that it has risen.

However the more serious problem for PC makers is simply getting enough supplies of magnetic storage hard drives. Suppliers say that their supplies will be 35% short of full demand at around 110-130m units, according to Digitimes, compared to typical quarterly demand of around 180m units for both internal and external drives.

That compares to total PC demand of around 90m PCs per quarter, although shipments usually rise in the fourth quarter of the year – meaning there will be greater competition for supplies in the next six months.

The cost of a 2.5in 500GB hard drive have risen from $45-50 (£29-£32) before the flooding to $60 now, and could rise to $70 next month, industry sources told Digitimes this week.

Hard drive vendors are expected to push up prices even further in the first quarter of 2012, which will drive up the cost of components for PC makers and individual buyers.

Seagate, one of the biggest makers of hard drives, has lowered its target for shipments in the quarter to between 41m and 45m units. It could take between nine months and two years for hard drive production to return to normal, industry sources suggested.

Acer, the Taiwanese PC maker and the world's fourth biggest in the third quarter, said it expects a 10% to 15% shortage in this quarter, and that the costs would be passed on to buyers. Acer also expects to make a loss for the full year, said company president Jim Wong, with its PC sales falling as much as 10% in the fourth quarter compared to the previous three months.



Charles Arthur
guardian.co.uk, Wednesday 30 November 2011 11.00 GMT
© 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved.
Hard drive supplies falling short and driving up PC prices, say manufacturers | Technology | guardian.co.uk

prices have already went up about 150 % in most retailers the only people that seem to be getting stock is large wholesale's and manufacturers

Glad i got mine in when i did 4 x 2TB.

I think Pob has this story linked about 10 times on his sig. lol