Worldwide HDD Shortage [Archive]

CruNcher

7th November 2011, 11:50

But in this case it's about Production capacities demand and availability losing some plants (even temporarily) isn't recoverable so prices go up is normal sure not all HDDs are manufactured in Thailand but a big amount that gone lost according to the industry (if demand stays the same you have a problem or better those that can supply the demand can higher the prices, efficiency wise the backups are close to a specific demand). Sure the thing is how do we know the demand is currenly so high and availability has been hit on that matter we have to trust the industry (we just saw there was a flood some plants drowning in water and that's it,apart from those that died which weights much more then some HDD plants go swimming)

LoRd_MuldeR

7th November 2011, 11:54

Yeah it's real, $150-200 for 1tb

Yup, it's crazy! I bough a 2 TB drive for ~55€ two month ago. Now the same drive is at ~225€.

Like ALL HDDs were manufactured in Thailand come on.

That's again a dirty trick to cope with falling prices ....

Well, as a matter of fact, there aren't that many companies who actually manufacturer HDD's. Most are just resellers.

And, as far as I have read, Western Digital alone (market leader for HDD's) lost 60% of its production due to the Bangkok flooding.

Even if the other HDD manufacturers weren't effected by the flooding (but in fact they are too), they couldn't increase their production quickly to compensate for that.

Also I would assume that most HDD manufacturers/resellers will give higher priority to the OEM market, making HDD's you buy separately even more expensive...

(BTW: I think the same could easily happen with CPU's/GPU's, because most "microchip" companies are fabless, i.e. don't manufacture their chips themselves anymore)

Ghitulescu

7th November 2011, 15:44

A quick check on my external HDDs (around 12) and none made in Thailand (but Korea, Philippines, China). I have only one (new) WD, a Velociraptor, but it's inside and I can't open it yet to check its origin.

Some time ago, around the introduction of DDR1 on the market, a quake hit Taiwan. The prices for memory chips skyrocketed, yet when the factories went back to work, the newer models like DDR2/RAMBUS went back to "normal" but those for DDR1 still remained insane. At the time there were manufacturers that had fabs in China and Korea as well, which were not affected (Samsung, Infineon and Siemens to name a few manufacturers active on the German market).

Given these I still think it's a marketing trick to raise the prices, using a natural disaster as a smokescreen.

hello_hello

7th November 2011, 16:42

I just checked the 13 loose internal (not external) hard drives I have on my desk, purchased some time over the last 3 to 4 years.

2 x Seagate 500MB, made in Thailand.
1 x Hitachi 2TB, made in Thailand.
3 x WD Green 2TB, made it Thailand.
1 x WD Green 2TB, made in Malaysia.
2 x WD Green 1TB, made in Thailand.
4 x WD Black 1TB, made in Thailand (purchased 2 months ago).

Supply and demand would seem to indicate if a large portion of the HDD manufacturers in Thailand were effected by flooding, prices might increase for a little while. Looking at the price list of my local PC shop today compared to their price list from September, most drives seemed to have increased in price by about 40%.

If it's a marketing trick to raise prices the HDD manufacturers must be guilty of some serious price fixing.

corporalgator

8th November 2011, 05:26

I work for Dell tech support and we send out a lot of replacement HDDs. Our HDDs are on back order, so it's not just some industry trick.

Ghitulescu

8th November 2011, 09:33

I was misunderstood: of course you're on back order if you insist getting the HDDs from the same factory (now flooded). But not all HDDs are made there, and the price is raised to separate the premium customers from the bulk (it's also a game of supply/demand, and, lesser known, also a legal/contractual issue).
It's like doubling the price of a Maserati because a storm hit Detroit.

hello_hello

9th November 2011, 18:00

I wonder if Dell would really insist on getting their hard drives from the same factory? It seems unlikely. Dell probably order them from the hard drive manufacturer and they're shipped from wherever they're shipped. It doesn't sound like the price rise is separating the premium customers from the bulk too well, given Dell have their drives on backorder.
It does sound like a genuine hard drive shortage to me. Nothing for the conspiracy theorists to get excited about.

Ghitulescu

9th November 2011, 18:40

No, but Dell/HP/IBM/you-name-it has contracts for a certain model. And a particular model is manufactured in only one factory. Unless the contract allows the change to an equivalent in case that particular model won't be available, the manufacturer MUST deliver that model.

Concerning the other point: supposing the manufacturer must pay damages to Dell for not fulfilling its part of the deal, in amount of say 5 million $. If anyone having himself a hot deal (eg delivering 100.000 units to the Army at Army prices :) ) pays for the stock 15 million $, the manufacturer will sell them gladly, still getting a nice profit, Dell being served after recovering the facilities. Maybe the manufacturer already got covered for the Dell deal from an insurance company :) which makes the situation even more pinkier. The crook is the premium buyer, Dell and us the unimportant ones. Like in any restaurant, the one that pays better (or suggests this) gets the best places.

The last point: I said nothing about conspiracy, it's pure business.

mariush

9th November 2011, 19:03

Ghitulescu, a lot of the drives are made in Thailand - Seagate, Toshiba and WD have factories there. WD's factories are flooded, Toshiba has one factory flooded, Seagate has the factories in another part of Thailand that's not affected yet.

A lot of the drives NOT made in Thailand are made with parts made in Thailand - for example the largest hard drive motor manufacturer Nidec has the factories near WD and their factories are flooded so they stopped production. Another company that had produced disk heads and other stuff near the flooded area announced they're going to move the production to US but this meant a 1-2 week pause in production at the very least.

Seagate basically announced the demand increased a lot and they can't get the parts in the amount they needed

See these for reference:

http://www.infoworld.com/t/hard-drives/the-impending-hard-drive-shortage-and-possible-price-hikes-176453
http://www.scientificamerican.com/article.cfm?id=update-1-thai-floods-mean-big-loss

If you need drives right now, look up external drives - some stores have larger stocks of these and try to get rid of them or just didn't realize yet. They're right now about 20-30$ cheaper than internal drives.

hello_hello

9th November 2011, 22:57

No, but Dell/HP/IBM/you-name-it has contracts for a certain model. And a particular model is manufactured in only one factory. Unless the contract allows the change to an equivalent in case that particular model won't be available, the manufacturer MUST deliver that model.

First it was Dell "insisting" the drives all come from the same factory.... for reasons yet to be disclosed.... now they're only made in one factory. Which by the way seems completely untrue given I have 2 x WD20EARS drives sitting on my desk with made in Thailand printed on the sticker, and 1 with made in Malaysia printed it.

Concerning the other point:

Well I'll give you points for being able to invent scenarios to support your claims.

The last point: I said nothing about conspiracy, it's pure business.

"Given these I still think it's a marketing trick to raise the prices, using a natural disaster as a smokescreen. "

Well given all the hard drive manufacturers are in on it and raising their prices and it's just a theory only you seem to support, I don't know what else you'd call it.
As mariush pointed out, it's not just the HDD manufacturers who were victims of flooding having production problems, others such as Seagate are finding the cost of HDD components is increasing while there's also a shortage of supply.

Ghitulescu

10th November 2011, 09:52

No need to argue, you're all right but still failed to explain why the price of all new HDDs raised when only one country out of several was hit by a disaster. A natural one this time.

Is the demand so huge to justify the raise of the prices? I mean the real demand, that from the customer, not that coming from industry which is based on prognosed sales figures. My point was that the common user shouldn't pay for the industry problems. When the factories moved towards East, those benefits haven't been passed to the customer. Only the costs.

It's anyway not my problem, I don't need any new HDDs nor new devices using an internal one, so they could raise the price per GB to match even the one of the memory cards, I don't care. All of you are now happy that you've found me utterly wrong and with this excuse go buy them at twice their regular price, but hurry, maybe by tomorrow it will triple :) Xmas is near, and CES 2012 is right after.

PS: It's also interesting to see, for the sake of argumentation, that the general consensus seems to be that the whole world production of HDDs depends on a tiny country in the middle of a politically and military unstable region, that enjoyed probably a total of only a few days of peace since 1900. Isn't that clever? Why not relocate the factories in Iraq or Afghanistan or even in Gaza?

PS2: Even if your next car (before Xmas) wouldn't be a Toyota, a Honda nor a Nissan, think twice, one never knows what parts of your GM is made in Thailand, too. The world car industry is again in peril. What would be next? The T-Shirt industry?

hello_hello

10th November 2011, 11:02

No need to argue, you're all right but still failed to explain why the price of all new HDDs raised when only one country out of several was hit by a disaster. A natural one this time.

I would have thought the fact that 25% of the world's hard drive production was effected by flooding would be explanation enough.

Is the demand so huge to justify the raise of the prices? I mean the real demand, that from the customer, not that coming from industry which is based on prognosed sales figures.

What's this "pretend" industry demand you refer to?
Should Dell or HP stop ordering hard drives to pre-assemble PCs based on projected sales and only make them to order because you or I also want to buy a hard drive?

My point was that the common user shouldn't pay for the industry problems. When the factories moved towards East, those benefits haven't been passed to the customer. Only the costs.

So you have a before and after cost of production analysis, or is that a second conspiracy theory?

mariush

10th November 2011, 19:27

People seem to forget hard drives are not just sold in computers.

You have them in video cameras, in surveillance/anti-theft systems, and lots of other places. Then you have a need for drives to fix existing computers, for NAS mass storage, to keep raid systems working, upgrades and last but not least replacing dead drives. Take for example a datancenter with 100k computers - 3 to 5% of the drives die within 3 years so that's at least 3% of 100k / 365 x 3 = 3-5 hard drives a day to replace.

Is it smart to have a large production capacity in a single country? No. But at the same time it's consumer's fault for focusing a lot on PRICE therefore forcing companies to move their production into countries where the manual labor is cheap.

Ghitulescu

10th November 2011, 20:04

1. the HDDs used for the "other" purposes are different from those sold to the general public. And one should not forget that the business model is to supply, not to react to demand.
I've seen not shop to say, hey, we haven't this on stock, but if you pay the double you'll get one next day. I've seens shops saying Sorry, we have no idea when the next batch arrives, and shops that still sell them at doubled prices, on stock.
2. it's not the consumers' fault. Actually vice-versa. They moved to China and let the prices stay unchanged, and only after the Attack of the Chinese Clones they dropped the prices to remain in business. I can't speak for all world, but this is how it happened in Germany.

hello_hello

10th November 2011, 22:06

It doesn't change anything if hard drives used for other purposes are different from those sold to the general public, and in this case supply has been effected while demand initially remained the same (at least until prices increased), so I'm not sure what point you're trying to make there.
For someone who has "doesn't need any new HDDs nor new devices using an internal one" you seem to be paying an unusual amount of attention to whether shops have them in stock and what prices they sell them at if they do. Have you been visiting shops pretending to be a prospective buyer in order to perform HDD purchase surveys? And how does what you've seen actually reveal anything other than a drop in supply?

Asmodian

10th November 2011, 23:11

No need to argue, you're all right but still failed to explain why the price of all new HDDs raised when only one country out of several was hit by a disaster. A natural one this time.

Supply/Demand curves, if you have less supply raise the price until demand meets supply. That way you make the most money. Econ 101

PS: It's also interesting to see, for the sake of argumentation, that the general consensus seems to be that the whole world production of HDDs depends on a tiny country in the middle of a politically and military unstable region, that enjoyed probably a total of only a few days of peace since 1900. Isn't that clever? Why not relocate the factories in Iraq or Afghanistan or even in Gaza?

Trust me they would if they could get reasonably stable labor and supply chains setup and total costs were lower. Business never thinks long term or worst case, it isn't (usually) cost effective.

burfadel

11th November 2011, 00:46

If there's trouble in China, due to civil war (China invading other countries is pretty unlikely, although should never rule anything out), then we're in real strife. 'We're' as the whole world 'we're'. This is something that is quite possible in 10-30 years, as the political divide in China grows greater.

Ghitulescu

11th November 2011, 07:32

Supply/Demand curves, if you have less supply raise the price until demand meets supply. That way you make the most money. Econ 101

Trust me they would if they could get reasonably stable labor and supply chains setup and total costs were lower. Business never thinks long term or worst case, it isn't (usually) cost effective.

That is exactly what I said. Why the need to think in advance when all you have to do is to pass the costs to the consumer? And in a quasimonopolist economy, that's hard for the consumer to find another source.

And yes, if there's no demand, how to create one? Well, panic solves a lot :)

hello_hello

11th November 2011, 10:39

So are the costs of business being passed onto the consumer, or is it still just a marketing trick to raise prices using a natural disaster as a smoke screen?
You seem to be offering argument for both sides of the debate now.

Ghitulescu

11th November 2011, 11:09

You have developed a brilliant strategy to extract statements out of their context and to combine them using binary logic (actually sophisms) to make the other one look like contradicting himself. It's no use to continue, it won't bring anything new to the actual topic.
PS: to further feed your "logic relays" - no, I never changed side.

smok3

11th November 2011, 12:00

i have some old 2gigs scsi drives, you think those will sell now? :)

Ghitulescu

11th November 2011, 14:45

It depends on their usability, I have a DAW that addresses a max of 20 GB and I won't change it, some that cannot address more than 120GB and again I won't give them away. So I stockpiled some older, smaller HDDs just in case :)

hello_hello

11th November 2011, 17:56

You have developed a brilliant strategy to extract statements out of their context and to combine them using binary logic (actually sophisms) to make the other one look like contradicting himself. It's no use to continue, it won't bring anything new to the actual topic.

No strategy. Nothing out of context. Just your argument going around in circles....

corporalgator

13th November 2011, 04:03

At the moment, Dell is anticipating the shortage until 1st Q 2012. We're not selling any new drives at all. We're keeping them all for new systems and for replacement of dead drives. We're telling customers to go to newegg or best buy to get new drives if they need one. We're still sending them out next business day, though, if someone calls in with a dead one.

Blue_MiSfit

14th November 2011, 06:41

@Ghitulesco and @hello_hello, please keep the arguments to a minimum.

Ghitulescu

14th November 2011, 09:29

I've checked the prices last week at one of the largest chain in Germany/Europe, nothing changed, and I was told that they still have stocks of HDDs made before the disaster, so they did not changed the prices. Online prices are different, the reason for many to go online is to reduce the logistic costs, so they probably sell HDDs at the current prices of the day, as they run generally on short supplies.

hello_hello

15th November 2011, 20:48

I suspect it's the OEM buyers who are noticing the price hike more than retail buyers. Maybe OEM sellers turn around stock faster than retail sellers, or they don't hold as much stock, or maybe the retail chains already enjoy enough of a purchase price advantage/markup to be able to continue selling them at the original prices. At least for a while.

I rarely buy from large retail chains, but out of curiosity I compared the price of a few external drives from one of the local retail chains with those from my local computer shop.
Before the price increase (just picking one external drive as an example) my local computer shop sold WD My Book Essential 3TB drives for $215 (Australian). Currently they're selling them for $259. The large retail chain has them advertised at $259 (I suspect that's what they've always sold them for). A few model external drives are now actually slightly cheaper at the local retain chain than they are at my local computer shop, which is pretty much unheard of.

Not that the retail chain sells internal, bare-bones OEM hard drives. Or they don't advertise them so I couldn't compare those prices directly, but when it comes to price increases it seems to be the discount or OEM price advantage which has taken the hit. Maybe while the majority of posters here will notice their OEM/discount buying prices aren't all that exciting any more, for the average person it appears not much has changed yet. It'll be interesting to see if normal retail prices do increase eventually.

I guess for the moment at least, no matter where we buy our hard drives.... we're all paying retail.

CWR03

16th November 2011, 02:20

...maybe the retail chains already enjoy enough of a purchase price advantage/markup to be able to continue selling them at the original prices.
Not here. About 6 months ago I bought a 2 TB hard drive for $109 US. The same drive in the same store is now $239.

Not that the retail chain sells internal, bare-bones OEM hard drives.
Fry's Electronics is a retail store, and they sell all sorts of OEM drives (both hard- and optical) as well as OEM Windows software packs.

hello_hello

16th November 2011, 04:30

Fry's Electronics is a retail store, and they sell all sorts of OEM drives (both hard- and optical) as well as OEM Windows software packs.

I was referring specifically to a local retail chain, but if ever I'm in your country I'll be sure to check them out.

ramicio

17th November 2011, 21:07

Not all manufacturing is where there were floods. Where there were floods, not all manufacturing was ruined. The prices tripling, for something not as major as it is, being played off to idiots, is nothing more than a farce. It's a clear scam. They are being played off as commodities, when in fact they are not a commodity. They could have simply not produced panic, kept the price the same, and when they run out they run out, and just supply them as they are made.

Asmodian

17th November 2011, 22:21

But then they wouldn't make as much money. Their reason for existence is to make money so what do you expect? If you think that is a scam then you think the entire economic system of the vast majority of the planet is a scam.

Not saying it isn't but hdd price jumps due to a drop in production aren't what I would be most upset by. :rolleyes:

ramicio

17th November 2011, 23:14

Supply and demand applies to things like commodities, not stupid goods like hard drives. It's a temporary lull, and anyone who buys into paying triple for something because only like 20% of its manufacturing in the world was affected is an idiot and playing right into their hands. If you think the way our current economic system is being run is all fine and dandy then you are an idiot.

Asmodian

18th November 2011, 02:03

Supply and demand applies, why wouldn't it? Hard drives are commodities now, data centers and other business customers need lots of them regularly and you can easily substitute one brand or supplier for another.

They want money, right now supply is low. If you can wait to buy then you wait if you cannot then they get more money.

I don't understand why people think this is different than anything else. Just be glad hedge funds don't bet on hard drive prices. :p

If you think the way our current economic system is being run is all fine and dandy then you are an idiot.

Haha, not going to argue with that. ;)

ramicio

18th November 2011, 02:10

hello_hello

18th November 2011, 05:05

And here was me thinking supply and demand applies to almost all goods and services.... even "stupid" goods like hard drives.... and not just those for which there is an outright shortage.

Yes, the drop in supply may only be a temporary lull, just as the increase in price will no doubt be temporary too. It seems to me like a perfect example of supply and demand at work, no matter how hard some try to ignore basic economics to claim otherwise.

Asmodian

18th November 2011, 19:03

Normal laws of supply and demand are simply not applying here. There is a dip in supply to meet demand, not an outright shortage. The prices f'ing tripled for f's sake. This would only be acceptable if all hard drive manufacturing everywhere was wiped out. The prices tripled, they are running a scam. But again, anyone who pays the triple prices have every right to do so. I have every right to call them an idiot, because they simply are. They are not commodities. I see price fixing here. If there was true competition, prices would not have tripled. This just smells of these companies getting together and saying let's triple the prices so we can be lazy assholes on getting the plants back and running, and use these outrageous prices to fix shit.

Ever watched oil prices? Oil is the definition of a commodity but if you get a 0.2% drop in supply you get a 20% jump in price.

They only have a specific number of drives; they know they will not have a warehouse full of hard drives no one wants at price X, so they set the price to X. If they did have a warehouse full of unsold hard drives they would lower the price. I think this shows how few discretionary hard drive purchases there are. You only drop demand 20% by doubling the price.

Edit: *all percentages pulled from the air