Storage HDD Prices

Wow, i bought one of these a couple of months ago for £39.58

 

I had one on sunday for £57, seemingly just in the nick of time now that it's gone up to £90.


Do we know for sure that things like casings for SSDs aren't made in the same Taiwanese sub-component factories as things like casings for HDD's ?

 

So Seagate buy Samsung's HDD business and WD buy Hitachi's and... whoosh! Nice little cartel they've got planned?

Just shows why competition is needed. Same with CPUs, Intel simply couldn't charge 1k for their latest greatest if there were 3 or 4 competitive desktop CPU rivals. It's every businesses goal to monopolise after all.

 

Completely missed the news regarding Flooding in Thailand wiping out 50% of the global HDD supply then yea?

 

In this instance the manufactures are loosing millions, and some of their employees their homes and even lives :=(

Only people making money here are the retailers who bought stock before Thursday last week.

 

I didn't know about this mega flood, no "1/3 of all 166m hdds shipped globally in Q3", is a lot idd. But more importantly at least 300 people have died.

Every drive (Hitachi and Samsung) I've ever used was either made in China or S. korea . Hdd business that if still independent would be less immediately affected, even by supply/demand issues, production would be ramped etc . But that's irrelevant I agree, certainly in light of these devastating floods in which people are losing everything.

 

Boy am I glad I chose to do that, the same drive has gone up in price by £25 in less than 12 hours on Scan!

 

Heh, just checked Newegg.com's price for a Spinpoint F3. It was $65 just a day after the flood, now it's up to $79.99 and sold out. I doubt it'll be back in stock any time soon, or if it is it likely will be at an even higher price.

 

I know that the prices are going to rise, but this seems a bit OTT...................

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Cheers
enterobsidian

 

LMAO at that!

The opposite has happened with the 2700K at Scan. It was £275 at the weknd for pre-order OEM version). It's now £258.20. I had pre-ordered, but it would sem there were more orders before mine than they could fill. I only noticed the price drop after I had read da few posts saying it's no better than the 2600K for overclocking, and went in to get a Scan code for the 2600K to get the 2600K instead. Win/win for me - £31.20 refund, a chip arriving tomorrow, and just as much chance of a decent overclock

I did consider cancelling the order, getting a full refund, then reordering at the lower price, but had a sensible moment and changed the order instead

 

WOW, that's insane!

I bought one of these for £45 at the weekend. 2 hours later they had gone up to £49. The seller told me his supplier had run out and he was surprised how quickly his stock was selling. I waited until he had marked it as dispatched before telling him, then I said he should cancel the listing for his remaining stock and check prices in 2 weeks. Looks like he has

I hope to know tomorow whether he is a genuine seller or not - he had 1 positive feedback as a seller then lists over 100 drives to sell at the start of a glut! Some folk bought them by the boxful, and one buyer has already given him negative fedback for not having stock. Either I got a good deal and he is one lucky SOB to go into business at the right time, or I'm getting a refund through eBay. I'm not too concerned either way - the money will be handy in a few weeks, and the drive will be OK for long term storage of 500GB of small tech files

 

Was looking at buying a spinpoint f3 a few weeks ago, from scan for about £40. Wasn't a nice surprise it had risen to £90 this morning.

 

http://www.reuters.com/article/2011/10/26/lenovo-idUSL3E7LQ1FA20111026

It seems there are a few companies with enough hard drive supplies to last them until the end of Q4. Now I'm wondering if the retailers are just trying to make a fast buck from people panic buying. Mathematically, assuming one Western Digital plant has been completed flood, suggests a ten per cent drop in worldwide manufacturing output and therefore I can't see a good reason for hard drives doubling in price. Admittedly, there could be component shortages.

 

It is largely panic buying in my eyes- people see that production has slowed down leading to slightly decreased supply, so everyone goes mad and starts buying up vast amounts of stock which sends the price sky rocketing; little difference to panic buying at supermarkets when people hear there may be bad weather coming- just look at sales of baseball bats during the London riots..

Even if 50% of HDD production was stopped, I don't see it driving up prices as much as it had as the factories could have increased production to ease demand ( double shifts or overtime etc ).

Ditto on the F3 1TB drives though, I bought mine about a year ago I think for ~£40, I bought an external 500GB WD MyBook for ~£80 2 years ago so it seems prices have been setback a year or so, probably will take that long again nearly for prices to reach pre-flood levels.

Anyone wanna buy my spare 320GB WD Caviar Blue for £50?

 

Your 10% estimate is very, very low. The real number in short term is closer to 30% - and with that 30%, we talk only about the 60% drop in WDC production. Then there are the logistic problems of Seagate, and uncertainty about parts manufacturers (they are flooded too). Factories can't increase production that much. Do you really think WDC would not increase it if it would be possible ? Do you really think WDC is having laugh at production decrease from 58 million in Q3 to 22-26 million in Q4 ?

The reason for price increase is mainly in very huge possibility of no new retail hard drive deliveries for long time. WDC will pretty much have no hard drives on retail market (or very low number). Seagate/Samsung/Hitachi/Toshiba will have to fill in at some OEMs for WDC as well, that will decrease number of hard drives on the market as well.

You can't just replace 30% of worldwide hard drive production in short term.

 

Yes I second that, we are talking about high volume commodity items, these factories already run 24 / 7 at very high efficiencies, that’s why we had the price drops over the last two years.
You can’t just find an extra 56 hrs a week if you already work 168 of them :=)
Plus this has actually effected WD, Seagate and Toshiba production plants.
And component suppliers.

If you think its bad now, wait till next week.......

 

I don't know to what extent there has been panic buying - with a bit of basic economic theory there are other ways to explain the phenomenal rise in prices and drying up of demand.

The fundamental laws of supply and demand dictate that if supply decreases and demand remains unchanged, then it leads to higher equilibrium price and lower quantity of transactions. The relationship is NOT linear - a highly elastic good will see a greater shift in the volume of transactions for a small shift in price, whereas the price of a highly inelastic good will have to move significantly further for the transaction volume to reach the equilibrium point dictated by the diminished supply. In other words it is a function of what the market will bear - if people are willing to pay significantly more for a scarce product, then the price will rise significantly. The retailers don't care if demand drops, so long as they can still shift every unit they can source. In fact it is bad business for them to allow their stock to run out - if they do, then they could almost certainly have increased the price further and still sold every unit, making a larger profit overall. The supplier that sells out failed to maximise his income by balancing demand (through pricing) against supply.

Retailers like Scan have sophisticated pricing models that are designed to maximise the amount of profit they make. Their prices are adjusted continually and quite possibly semi-automatically to take account of historic demand, current stock and forecast supply. They may also automatically benchmark their prices against competitors.

Finally, in a market where prices are rising and there is reason to believe they may continue to rise (as here), every person in the supply chain has a strong incentive to hold on to whatever stock he has. This means that the effect of a drop in supply at manufacturer level can be amplified throughout the supply chain.

 

Consider the fact that WDC has 50% share of the HDD market. Then factor in that 40% of WDC drives are made in Thailand. Calculate the 50% market share and 40% WDC Thai HDD means the two WDC factories in Thailand produces 20% of the world's market share for HDDs. Now if one WDC factory is completely out of action due to flooding this leaves the other factory producing 10% of the world's HDDs.

I do recognise the logistic problems with HDD components and this was stated in my last posts. But no one knows the true scale of the problem yet.

 

If we do a similar maths puzzle to work out were the drives go, I think this would highlight why it causes such a problem for the average Joe buying a single drive from ebuyer.

I.e. 10% of all drives go into their own products, (external HD and media players)
50% go to the big boys of PC building (Dell, HP etc...)
10 % go to the other corporate volume users, I.e. sky box and Humax PVR etc...
So with a good following wind and some on the back of a napkin maths I get 30% left for retail buyers and small system builders.

Hence it makes such a difference if we are 10 to 40% down on capacity.
PS I have no PhD in economics just best guess :=)

 

It's actually gone up another £4 ish since i posted lol