Hard drive supply shortage and price hikes = hoax

Rouxenator

Dank meme lord
Joined
Oct 31, 2007
Messages
40,443
Every since the whole Thailand flood issue hard drive prices have gone up and is some cases you now pay more than double what you paid for a few months ago.

I am aware that some of the production facilities have been flooded but can the impact really be that big? I mean, it must be massive if unit prices start to double?

Personally I think this is a hoax, I have been buying hard drives for 15 years now and never once did I buy a unit that originates from Thailand. Newer ones are "Made in China" and prior that that it was "Assembled in Malaysia" or "Made in Singapore". OK, I have never bought a WD so that could explain it.

According to Wikipedia Thailand only produces 25% of the global HDD supply and most of that is WD drives. Does it not therefor make sense that WD prices should go up more than the rest? Taking into account Thailand's contribution to HDD supply I'd say prices should go up at most by 25% to 50% - definitely not double as is now the case.

Anyone else feel we are being taken for one massive price fixing scam?
 

The_Unbeliever

Honorary Master
Joined
Apr 19, 2005
Messages
103,197
Roux - it was not just one HDD manufacturer/supplier that got taken out - a whole lot of smaller HDD component supplier/manufacturers also got taken out.
 

Messugga

Honorary Master
Joined
Sep 4, 2007
Messages
12,047

Apparently the big corporates like Google and such have been buying up massive amounts of drives from other manufacturers in an effort to avoid shortages. I reckon they probably went a tad overboard, just because they can really, and to avoid paying inflated prices later, which artificially increased the drive shortage. It's basically the same principal as what happens when petrol runs out. Everyone and their neighbour's dog goes to buy in order to make sure they don't run out of petrol, which puts way above normal strain on the now crippled supply, which simply increases the pressure experienced by the consumer.

A hoax? I think not. Unnecessary? Quite possibly.
 
F

Fudzy

Guest
Yeah unfortunately HDDs are made up of many components, it's those suppliers that were more affected than the HDD manufacturers themselves.
 

Ecco

Executive Member
Joined
Jun 4, 2007
Messages
8,176
Not really a hoax.

see this article:
http://in.reuters.com/article/2011/12/13/intel-outlook-idINDEE7BC03I20111213

(Reuters) - Intel Corp warned that hard-disk drive supply shortages would hurt its current-quarter revenue, the latest heavyweight in the PC industry to caution about the effects of flooding that has crippled factories in Thailand.

The warning sent shares of the world's top chipmaker down 4.8 percent and weighed on Wall Street.

A 4.8 percent drop is quite a big drop.
 

Derrick

ლ(ಠ_ಠ )ლ
Joined
Nov 22, 2010
Messages
5,085
A scam? No, unfortunately not.

60 percent of Western digital's hard drive production is based in Thailand, so yes they have been hardest hit by the floods.

However Seagate also have operations in Thailand, which include and R&D division and production facilities if memory serves.

You also need to consider that hard drive manufacturers don't make each and every component found in a drive. Nidec for example makes spinning motors for hard drives, and they're based in Thailand (at least one arm of their operations is.) They've had to shift production to other facilities in countries like China. The floods affect the supply of components, but these companies also have to cover the costs incurred by the flooding, and as such have to increase the prices to cover that. In order to recoup losses, Nidec will charge WD more, so WD has to charge us more.

Nidec is just one parts supplier, you better believe that they have many, as do WD and others.

Also, just because something was nailed together in China, it doesn't mean everything was made there. They could produce components in Thailand, then ship them over to China for assembly.

Then there are the large companies who are practically begging for drives right about now (think Google, Facebook and others). They've had to turn to the likes of HP to secure drives (HP obviously has contracts with the likes of Seagate and/or WD to gain a higher share of drives than buyers.)

Finally, Intel have had to cut their sales forcast by over $1 billion due to the hard drive shortage. It's hard to think that a company that produces CPUs would be affected by hard drives, but it's not as simple as that.

So nope, not a price fixing scam. :)
 

grok

Honorary Master
Joined
Dec 20, 2007
Messages
24,969
The price increase was largely caused by panic buying. Apparently after the flood large retailers & manufacturers bought up most available stock to carry them through the xmas season.
This lead to shortages and we all know how that curve goes..
 

Keegan

Expert Member
Joined
Sep 12, 2011
Messages
1,830
:D

http://www.cpusolutions.com/store/pc/catalog/wd_thai_lake_3_small[1].jpg

it_image.jpg
 
Last edited:

reactor_sa

Executive Member
Joined
Feb 6, 2009
Messages
7,847
I refuse to pay more than 1k for a 2tb. I will wait for upto a year.

Sent from a Galaxy SII far far away via Tapatalk
 

Rouxenator

Dank meme lord
Joined
Oct 31, 2007
Messages
40,443
OK, seems to me there are some valid points here - but I still think it is being blown out of proportion and somewhere someone is making a quick buck. I'm boycotting HDD until the prices return to what they used to be or lower. If everyone did that I am sure supply would return to normal in a few days time.
 

Flidiot

Senior Member
Joined
Nov 23, 2011
Messages
915
OK, seems to me there are some valid points here - but I still think it is being blown out of proportion and somewhere someone is making a quick buck. I'm boycotting HDD until the prices return to what they used to be or lower. If everyone did that I am sure supply would return to normal in a few days time.

I think the biggest issue is that not everyone can boycott HDD's, even if their price tripled.

For home use, by all means - but in a business environment, I doubt I will see any of my clients saying "no, it costs too much, so don't put it in". They will moan about it at first, but will bite the bullet and just fork out the cash in the end.

It is a pain in the butt though when a hard drive alone accounts for 20% of the cost of a simple PC quote....
 

Re83L

Expert Member
Joined
Mar 28, 2007
Messages
1,258
I think it's high bloody time they make waterproof HDD manufacturing plants :D
 

howardb

Expert Member
Joined
Sep 12, 2003
Messages
3,446
I'm also going to give HDD's a wide berth until the pricing normalises - make do with what I have...
 

lucifir

Expert Member
Joined
Mar 17, 2004
Messages
3,492
OK, seems to me there are some valid points here - but I still think it is being blown out of proportion and somewhere someone is making a quick buck. I'm boycotting HDD until the prices return to what they used to be or lower. If everyone did that I am sure supply would return to normal in a few days time.

+1
 

h0ll0w

Expert Member
Joined
Apr 13, 2005
Messages
1,314
So nope, not a price fixing scam. :)

Well I reckon it actually is. But the whole supply and demand thing is, it is a form of exploitation.

Is it literally more expensive for the bottom level supplier to now manufacture their parts ? Maybe slightly increased shipping costs from another location to the assembly plant ?

Does it cost WD/Seagate et al more to assemble the drives ?

I cannot see why it should it is still the same parts. Again, I don't see how it can be physically more expensive to produce that exact same 1TB hard drive.

So supply and demand predicts that you can price your product whatever you want to, the majority will keep buying because they have to. So in principle you exploit their situation.

If they were determined to not exploit anybody, they would keep the price the same, and when there is literally no more stock tell people : Sorry there is nothing left, but please bear with us for a few months while we get through the backlog and get our factories back to 100% operational capacity.
 
Top