Hard Drive Shortage to See Major Relief in Q1 2012

Severe floods in Thailand in late 2011 left the hard drive industry in a bad spot. It's the place where manufacturers and component suppliers come together, and when flooding occurred, HDD manufacturing came to a near halt. As a result, there was a subsequent shortage of hard drives, which itself led to higher prices that still linger today. Is there any relief in sight?

The answer is yes, sort of. According to DigiTimes, global HDD production capacity is getting ready to increase to 140-145 million units in the first quarter of 2012, or about 80 percent of where it was prior to when the flooding hit.


HDD production was sitting around 175 million units in the third quarter of 2011 before the floods, after which time it quickly dropped to 120-125 million units. Since then, there's been a concerted effort to restore operations to pre-flood levels. By the second quarter of this year, DigiTimes says production capacity will rise to 160 million before returning to 175 million in the third quarter.

Unfortunately, that doesn't necessarily mean prices will suddenly drop to pre-flood levels. On the contrary, higher priced components and materials means HDD prices will likely rise 30-40 percent from before the floods by the end of the year. Bummer.