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HDD pricing said not to ease, will in fact get worse

The latest word on the HDD situation post Thailand’s devestating floods last year is a somewhat frustrating one with a report indicating that while the global production capacity of hard drives will increase to 140-145 million units before the end of this quarter (which equates to 80% of the level production was at prior to the floods), inventories of products and components were said to have been exhausted through December 2011 and heading into January 12 as they were mostly snapped up by PC and notebook manufacturers.

Quotes have not yet been hiked due to the off-season which has followed, but they are expected to increase by a further 30 to 40% over the next 10 months or so on top of the already significantly inflated pricing we’ve seen since the floods destroyed much of Western Digital’s and Toshiba’s manufacturing facilities in particular. Note, the source has a discrepancy in that it says the 30 to 40% hikes are based off the prices of HDDs prior to the floods. This obviously can’t be as to date we’ve already witnessed inflated pricing that has tipped 100% or even more.

These 30-40% price hikes talked about by the source don’t make a lot of sense however, and a bit of a fishy smell is starting to woft in the air around us. If 80% of the global supply will be back by the end of this quarter as predicted and 100% in the third quarter, shortages can no longer be an excuse for the continually climbing, ridiculous prices we’re seeing on HDDs right across the retail market.

Okay, so there is talk of increased prices with regard to raw materials, components and labour costs, but it’s hard to justify that alone as being the reason why prices would continue to climb by such an absurd amount in such a short time frame while production is getting right back on track.

Source: Digitimes

KitGuru says: Excuses excuses – some real exposure needs to be brought on this situation in that there’s a darker, greedier side after the events that unfolded following last year’s floods.

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