Mobo Manufacturers Expect Shipment Decline in Q4, But HDD Motors Spinning Up

Multiple motherboard manufacturers are warning that precipitously rising HDD prices will impact their sales. Gigabyte has issued guidance that it now expects Q4 shipments to fall by 20 -25 percent, while Asustek predicts a much smaller decline of ~five percent. Analysts believe Asus is underestimating the impact of the price increases, and think the company's sales could fall as much as ten percent. This would be in line with guidance from MSI, ECS, and Asrock.

Exposure to the shortage will vary depending on the degree to which a manufacturer relies on retail sales and the price points of their various products. The impact on budget boards in the retail channel, for example, is likely to be catastrophic. Orders from companies like Dell and HP are likely more secure as OEM prices, thus far, have not risen to the same extent as retail HDD prices.

Meanwhile there's some limited good news on the HDD front. The motor manufacturer Nidec, which builds an estimated 75 percent of all HDD motors, has announced that its Ayutthaya plants in Thailand have resumed production. The company is also boosting production capacity at its Philippines and China facilities. Production in the Philippines is expected to rise to 25 million units (up from 15 million initially) with China boosting to 15 million, up from 10. This will change Nidec's overall capacity distribution significantly. Prior to the flooding, company capacity was divided at 62 percent in Thailand, 23 percent in the Philippines, and 15 percent in China. In the future, production capacity will be 36 percent in the Philippines, 21 percent in China, and just 43 percent in Thailand.

Hopefully all the manufacturing equipment was on the second floor

Nidec's increased production is welcome news, but it doesn't materially improve the total situation. Although initial reports focused primarily on Nidec's roll in HDD production, multiple drive manufacturers have facilities based in the same area. Said facilities are now underwater with more than three feet of water flooding some of Toshiba's facilities. Even if the water drained away tomorrow, it'll be months before Toshiba can clean and repair its plants. Western Digital faces similar problems and is easily the worst-hit company in the crisis. Meanwhile, even if the factories were themselves in pristine condition, the roads, electricity poles, and the homes of workers are all wrecked. Repair vehicles will pour into afflicted areas as the waters recede, but such efforts make it even more difficult move goods smoothly in and out of an area, at least in the short term.

Nidec's improved capacity will boost supplies of a vital component, but there are multiple points of failure along the supply chain and no easy way to restore full production.
Via:  DigiTimes
Super Dave 3 years ago

Here in the United States we have LOTS of land available to manufacturing that isn't prone to flooding!

MMcCutcheon 3 years ago

^^ Super Dave is super right.

omegadraco 3 years ago

@Super Dave you are absolutely right but they can't hire workers for 3 dollars an hour. But they probably could get away without paying taxes.

OptimusPrimeTime 3 years ago

"I think that Mobo makers using the Hard drive dilemma as an excuse for low sales expectations is rather ridiculous. A hard drive , as pricey as it is, is not going to get in the way of anyone buying or Building a new PC, please. If you can't afford a 1TB HD, settle for a 500 or a 320GB, until everything normalizes. Its that simple and it's not that bad of a situation. Before the floods, you could see countless deals through E-tailers trying to get rid of their excess inventory of hard drives, now , even with the unfortunate events in Thailand, I believe that there will still be a steady enough supply and distribution to meet demands until at least production begins to ramp up to almost normal operations."

"They should just admit it, Tablets and Smart Phones are taking a large chuck of the pie."

AKwyn 3 years ago

I explained this before and I'll explain it again. There are companies out there that rely heavily on Hard Drives, TiVo for one... If the prices of Hard Drives increase and the company who buys it has to pay for the hard drives then the cost will be passed down to the consumer, hard drive size included... I mean who'd want to buy a computer or a motherboard if the hard drives are going to cost more... And if the Thailand is in trouble then it's going to be a lot tougher to troubleshoot a hard drive or get an RMA on it if the drive is defective; do note that a defective drive count towards the inventory as you're replacing a defective drive with a supposedly new one.

There are a lot of issues when it comes to the Thailand floods; the motherboard manufactuers were right when they expected losses. Though they're not going to be as big as expected, it's still a loss. And let's not forget Thailand makes other things besides hard drives, such as a large amount of electrical components; without those motherboards wouldn't even be made you know... Of course there is the option of moving it to the US... Benefits the motherboard makers and it benefits us as it gives us jobs and industrial stability which is solely needed now with everything being outsourced overseas.

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