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News Hard disk supply 35 per cent short in Q4

Discussion in 'Article Discussion' started by arcticstoat, 28 Nov 2011.

  1. Lenderz

    Lenderz Member

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    Actually its not about the "HDD" production being done in one place, its about supply chain of high tech parts, and yes the majority of this is done in one country.

    And yes this is real, and its tragic not some money grabbing scheme, the factories have been devastated, I'm surprised BT is only reporting this now, its been known in the industry for over a month now.
     
  2. longweight

    longweight Possibly Longbeard.

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    And the award for lack of knowledge goes to.....
     
  3. Fingers66

    Fingers66 Kiwi in London

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    ^ this.

    Source: http://www.xbitlabs.com/news/storag...on_of_Motors_for_Hard_Drives_in_Thailand.html
     
    Last edited: 29 Nov 2011
  4. DBA

    DBA I do my modding with a spoon

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    IT'S A CONSPIRACY!!!

    also: if you have 3 factories making 100% of the worlds HDD production, how many percentage would the total production go down, if one factory was taken out?
     
  5. mecblade

    mecblade 14 year old Technophile

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    Hard Drive manufacturing equipment costs millions and replacing them is not something the manufacturers will enjoy. If you were a HDD manufacturer, would you rather that cost come completely from your profit or would you rather take a smaller hit by increasing prices?

    You do realise everyone involved in the HDD supply chain is taking a hit at the moment? If they really wanted to 'rip you off', they wouldn't be placing a limit on one hard drive per order like SCAN are doing.

    That's Demand Pull Inflation for you. Fact of the matter is supply is falling short of demand, and HDD manufacturers rather give the punishment to the consumer who represent a minority of their sales while the OEMs are a more valuable customer.
     
  6. mclean007

    mclean007 Officious Bystander

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    Disagree entirely regarding price hikes being driven by a desire to recover disaster losses - this is a pure market forces issue and you are right re demand pull inflation - supply of a finite commodity has dropped so prices must rise to bring demand back into equilibrium. Sure the increased prices these component manufacturers may now be able to command will help, but I wouldn't be surprised if the vast majority of their output is already sold under forward contracts with drive manufacturers at pre-agreed prices, so they may actually be losing out even more by having to pay penalties for defaulting on supply obligations.

    Also big OEMs (and big end users of drives like Google and others operating huge datacentres, so Apple, Microsoft, Facebook et al) likely take forward contracts on drives, locking in or capping prices several months ahead, so the manufacturers will be required to honour those contracts at the contract prices. This effectively shifts the supply drop to those who don't have such forward contracts, exaggerating the effects of even a marginal drop in supply - as an example, if there are 100 drives available, a 20% drop in supply reduces that to 80, but if (say) 60% of initial supply is already absorbed by guaranteed demand under forward contracts, the floating demand for the remainder has to fight over 20 drives instead of 40, so in this example the effective drop in supply to those would-be buyers who don't have forward pricing arrangements is 50%, driving prices up.

    Basically, being on the buy side of a forward contract for drives or components looks like a smart play right now; the person on the sell side and the end user with a time critical need for HDDs are feeling the pain. For most consumers, the smart move is simply to wait it out - it may be a bit frustrating for us geeks but there are surely very few consumers who NEED a new HDD RIGHT NOW. I feel bad for small players in the IT business, for whom HDD prices may have a significant impact on profitability but who don't have the resources to absorb the cost or to have put in place forward pricing arrangements as a hedge.
     
  7. Xir

    Xir Well-Known Member

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    During the Japan Earthquacke/Tsunami last spring, 300mm silicon Wafer production was down by over 30%.
    (one Shin-Etsu fab alone produces ~20%).
    That's a good 800.000 300mm Wafers a month missing.
    Did you notice a tripling of prices for everything silicon based? ;)

    nope...then again, truth be told, the silicon isn't the expensive part of processor, or graphics chip...it a considerable part of a flash/RAM chip though.
     
  8. Waynio

    Waynio Relaxing

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  9. K.I.T.T.

    K.I.T.T. Hasselhoff™ Inside

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    If only i could backup all my data, my HDD's are now worth double what i bought them for and far in excess of the rest of the system XD
     
  10. Nicho133

    Nicho133 New Member

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    I was going to get a 2TB WD Green before the prices went up, but now since it's about $130 more expensive then a couple of months ago I'm going to try and wait till the prices go down. This has kind of given me the opportunity to go through my data on my 500GB WD Green deleting stuff I will never use again.
     
  11. yakyb

    yakyb i hate the person above me

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    it hasnt given you the oppurtunity to clean your data it has forced you to be more efficient with it which is completely different
     
  12. fluxtatic

    fluxtatic New Member

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    I had almost the same experience as Nicho. In my case, though, it was an idle thought to pick up another 2TB for my server. Then I saw for the first time the story on the floods (here on BT, in case you missed it.) Out of curiosity at that point, I checked Newegg and found prices had doubled or nearly tripled in some cases. Lucky for me, I can wait it out. At worst, I'll pick up a spindle of DVDs and spend a weekend burning to free up space.

    Unlike Nicho, though, not a WD Green - I bought a 1TB a while back and it's hideously slow....too bad that by the time prices get back to right, Samsung won't be Samsung anymore :(
     
  13. cameronjudson

    cameronjudson New Member

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    Does this include the HDD for the laptops as well? or are these about the desktop computers unit? And secondly, arent these the company's own products? I mean I thought may be the HDD's are products of the same desktop computer manufacturer's products.
     
  14. PingCrosby

    PingCrosby New Member

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    "Hard disk supply 35 per cent short in Q4", pfffffffft thats nothing, my midget friend is 75% short all the time, actually, he got mugged the other day whilst out christmas shopping, a police spokesman said "This is absolutely despicable, how low could someone stoop?".Mind you he does look a bit dodgy and he was arrested outside the butchers the other day, he admitted that he was going to rob the butchers but changed his mind cos he thought the steaks were too high......sigh, Merry Christmas.
     
  15. DC74

    DC74 Doh!

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    Well I recently rebuilt my system and was going to replace my 640Gb Sata 2 drive with a 1TB Sata 3 one, mother nature, totally screwed up my plans when the floods hit. Well the blame doesn't solely lie with nature, its stupidity to build a factory in a low lying area, even more daft when that country suffers from heavy annual rainfall and is succeptible to typhoons. All this makes it even more nuts thats one of the few factories capable of producing HDD's.

    HDD producers are going to lose alot of cash when ppl switch over to SSD's and never look back. all you need is an external HDD or NAS drive and keeping what you need on the SSD is easy enough, not to mention boot times are alot quicker.

    I for one am going to buy an SSD after christmas, which will keep me going till HDD prices drop to a more sane level.

    On a plus note Z68 boards now become more appealing, as you can use a small SSD to increase HDD performance.
     
  16. mediapcAddict

    mediapcAddict New Member

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    The question for me is
    "when will prices go back to pre flood levels"

    £60 bought your 2tb of space delivered to your door. Now scans cheapest is £120 delivered to your door.
    There are only 2 main manufacturers using 4 brands ("western digital and hitachi
    " and "seagate and samsung"). The cost of building the hard drives are pretty much fixed. If the manufacturers can sell the hard drives for twice the price and have no competition where is their incentive to increase supply and reduce prices?? I loved my £60 2tb drives but I don't see them coming back. not with only two companies in charge of supply.
     
  17. longweight

    longweight Possibly Longbeard.

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    Yes the prices might be fixed but the supply of components is still very limited!

    Do people still not understand what is going on?!?!?!?!?!?!!?!?!?! :wallbash::wallbash::wallbash::wallbash::wallbash::wallbash::wallbash::wallbash:
     
  18. mclean007

    mclean007 Officious Bystander

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    Oh dear, looks like someone needs to go and take economics 101. How do you think the low pre-flood prices came about? It's called competition, and whether there are two players or a hundred, unless there is a price-fixing cartel in operation the market finds its level. Prices are higher now because a supply shortage caused demand to outpace supply at the pre-flood prices, as a result of which prices rose to find a new equilibrium point. It's not rocket science. In time, the limited supply will open up again, and competition will force prices back down.

    Also the price of manufacturing is not fixed - the marginal cost of components in times of good supply may be fairly consistent, but bear in mind the difference between fixed and marginal costs - if a manufacturer's ability to supply takes a temporary drop, he still has to pay staff, finance costs on factories, office admin, utilities, commercial property taxes, professional advisers' fees and a whole host of other fixed costs. So the cost per drive goes up when fewer drives are made. Add to that the fact that the damaged factories will have to replace damaged tooling (a large capital expense that has to be amortised over the life of the equipment as a cost of manufacture) and the fact that some components have suffered supply shortages that will have pushed their unit prices up, and it is very easy to see why drive prices have risen.

    There may be an element of profiteering in some parts of the supply chain by price gouging during this period of limited supply, but when that stops the prices WILL fall again. This is not some sort of conspiracy to drive up prices and profits - it's an economic effect of a huge humanitarian disaster, and to be honest in the context of the tragedy in Thailand, geeks moaning about a temporary blip in hard drive prices which they can probably still afford to buy or can wait until prices soften, is starting to look a bit tasteless.
     
  19. RealBeast

    RealBeast New Member

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    I bought 8 3Tb Hitachi 7200rpm drives just before the flooding when they were on sale for $149 each, now they are $400 each -- couldn't afford my storage array today. I almost waited for a better price, better to be lucky than smart I guess.
     
  20. Star*Dagger

    Star*Dagger New Member

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    I only have 8Tb in my gaming tower, and another 16Tb in externals. I guess the 50Tb upgrade will have to wait till next year!
     
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