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prices will remain high until 2014 thanks to long-term agreements between computer makers and hard drive makers

The massive flooding in Thailand last year significantly affected the ability of several manufacturers to produce hard drives used for data storage in computers and other devices. The flooding meant that much of the production capacity was unavailable and led to shortages and increased prices for available hard drives.
According to iSuppli, the price of hard drives isn't expected to return to pre-flood levels until at least 2014. That means for more than a year, prices will be inflated due to shortages caused by the flooding. ISuppli reports that the average selling price for the entire hard drive market grew to $66 in Q4 2011, which is up 28% from $51 in the third quarter. The average selling price held steady at $66 in Q1 of 2012 and is expected to slide to $65 in Q2.
The flooding in Thailand led to a 29% reduction in the number of hard drives shipped in Q4 2012. That significant reduction in shipments is expected to end and production will be completely recovered by Q3 of 2012. The company reports that hard drive shipments increased by 18% to 145 million units in Q1 2012 and in Q2 increase by 10% to 159 million units.
ISuppli is predicting that shipments will increase again in Q3 2012 by another 10% to 176 million units. Q3 is expected to be the first quarter where shipments or exceed 2011 numbers. Despite the return to normal shipment levels, pricing is expected to remain flat with no decline.
“HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep ASPs steady,” said Fang Zhang, analyst for storage systems at IHS. “With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 percent of HDD market share in the first quarter 2012. This was up from 62 percent in the third quarter of 2011, before the mergers. The concentration of market share has resulted in an oligarchy where the top players can control pricing and are able to keep ASPs at a relatively high level.”

One reason pricing won't decline is that a number of original equipment manufacturers in the computer industry signed a long-term agreements with hard drive makers to guarantee drive shipments but locking in prices about 20% higher than were paid before the flooding.

Source: iSuppli

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Good times
By MikeMurphy on 6/11/2012 9:36:14 AM , Rating: 2
... and there has never been a better time to buy an SSD!

Prices are falling dramatically and reliability is climbing. A good time for many to say goodbye to magnetic storage.

RE: Good times
By KC7SWH on 6/11/2012 9:54:02 AM , Rating: 5
And it will cost me how many thousands of dollars to put all my movies on SSDs? No thanks, I'll stick with magnetic storage for a bit longer.

RE: Good times
By Flunk on 6/11/12, Rating: -1
RE: Good times
By Azsen on 6/11/2012 6:27:24 PM , Rating: 4
Umm what? How can the SSD be damaged by storing compressed video (xvid, mp4 etc)? It's just supposed to store the 1s and 0s at the end of the day. Have you got sources for this?

RE: Good times
By tecknurd on 6/11/12, Rating: -1
RE: Good times
By dark matter on 6/12/2012 5:02:13 AM , Rating: 2
All SSD's, at least in the consumer sphere, loose performance as they fill or use every last available free block. That is the issue with NAND.

I suggest you look up "garbage collection" and "wear leveling" and get yourself a primer on how SSD's work.

RE: Good times
By spread on 6/11/2012 10:03:38 PM , Rating: 4
Sandforce-controller based models can actually be damaged by being filled by compressed video.

Please explain further.

RE: Good times
By dark matter on 6/12/2012 5:02:51 AM , Rating: 2
He is talking "garbage".

RE: Good times
By icanhascpu on 6/12/2012 1:05:11 PM , Rating: 2
I see what you did there.

RE: Good times
By Brandon Hill on 6/11/2012 10:01:06 AM , Rating: 2
For you, stick with HDDs. But for the vast majority of people, a lot less will do. How many average consumers do you think use more than 100GB of storage space? How many even know how to rip movies to their HDDs? They're mainly surfing the web, loading pictures, or gabbing on Facebook.

Just look at the popularity of the iPad which tops out at a whopping 64GB and appeals to a mainstream audience.

I know for me personally, I have a 128GB SSD in my laptop that still has 40GB free (that's with seven 720p movies on the drive). I have a 1TB external HDD, but that's mainly there just to backup my machine and archive photos.

RE: Good times
By bug77 on 6/11/2012 10:38:38 AM , Rating: 2
How many average consumers do you think use more than 100GB of storage space?

Quite a lot, since a single game can use 20GB or more.
I still remember a funny story when SSDs were just making their appearance. One reviewer wanted to test Crysis loading times, only to discover Crysis and Vista did not within the 32GB of the SSD.

RE: Good times
By Brandon Hill on 6/11/2012 10:35:35 AM , Rating: 2
Average consumers still play hardcore PC games? PC games are being relegated to a niche it seems. Consoles are the mainstream game systems these days and what most developers target because that's where the $$$ is.

RE: Good times
By SlyNine on 6/11/2012 11:11:42 AM , Rating: 2
I'd say its a lot more then a niche. I know about 10 different people at work and friends that play PC games. Not facebook games but games like crysis.

RE: Good times
By bug77 on 6/11/2012 11:23:56 AM , Rating: 3
Going by that definition, average users don't need SSDs either as their needs are covered by a tablet these days. If space was so unnecessary, why make HDDs larger than 320GB? Nobody would buy them.

RE: Good times
By amanojaku on 6/11/2012 12:21:38 PM , Rating: 2
I don't think Brandon is saying large HDs are unnecessary. He's saying the typical user doesn't need a large HD. Gamers are not typical users. Video editors are not typical users. 3D animators are not typical users. File hoarders are not typical users.

I have Windows 7, MS Office 2007, and some utilities installed, for a grand total of 30GB. Four or five games would take up around 30GB. The 64GB SSD I have installed would be just enough.

Got data? You're not a typical user. Get a NAS and put some TB HDsin it!

RE: Good times
By StevoLincolnite on 6/11/2012 4:50:24 PM , Rating: 2
Got data? You're not a typical user. Get a NAS and put some TB HDsin it!

I know lots of people with a Terabyte+ drive full of pr0n...

RE: Good times
By mindless1 on 6/12/2012 9:52:35 PM , Rating: 2
Uhh, sure but once you put it like that, the typical user doesn't need a PC newer than about 7 years old either.

However you have it quite wrong about your SSD capacity. Having 60GB filled SSD with only 4GB free space causes a lot faster garbage and a lot more rewrites of available space. You'd be much better off with a 128GB SSD to hold 60GB total data.

However the "typical" user can be more advanced than many realize. Some may record video, others may collect MP3s, others may take 10MP pictures of their family all day long, constantly.

Some may be moving to a paperless office and scan high res everything. There are lots of ways to need more capacity than is reasonably affordable from an SSD, when you stop to consider the storage device could easily cost as much as the value of someone's entire computer...

"Average" people use PCs worth about $150 total, and only replace them when they break and (or malware causes...) cost of repair exceeds the value of the system.

RE: Good times
By MrBlastman on 6/11/2012 12:02:20 PM , Rating: 2
I don't care if it is a niche or not, I'm in it and I like it. :)

If developers were to stop making a great deal of "hardcore" titles for my "market," It wouldn't matter so much as most of the hardcore crowd just makes the game themselves (or mods it) if nobody else will make what they want.

Just look at Mechwarrior Living Legends... no Mechwarrior for YEARS, what do they do? Middle finger and make their own. Falcon BMS... no true hardcore dynamic campaign based simulator supporting cockpits and external displays, what do they do? They mod it themselves. There's plenty more examples but these two get the point across.

I believe that if kickstarter proves anything in the future, it will be that there is plenty of demand for certain types of gaming that have been written off by the suits for years, yet, somehow there still is a way to make money with them for the target audience. Kickstarter is a neat experiment for now but I think it might be a thorn in big business' side in the future. If all of a sudden the publishers find that designers don't need them... what are they going to do?

RE: Good times
By Solandri on 6/11/2012 12:26:15 PM , Rating: 3
PC games are being relegated to a niche it seems. Consoles are the mainstream game systems these days and what most developers target because that's where the $$$ is.

If you've been around a while, you've seen this cycle before. Hot new consoles come out and everyone talks about how PC games are being relegated to a niche. A few years later when the console GPU hardware is getting long in the tooth, everyone talks about the resurgence of PC gaming. Then the new consoles come out and the cycle repeats. Have you seen the demo videos coming out of E3? They're gorgeous, and they're all PC. The current gen consoles (which were fixed in stone two PC upgrades ago for me) just don't have the horsepower to render like that.

PCs will always have access to the latest GPU hardware and will thus always eclipse consoles on the gaming front a few years after a console is released. Unless they can get the time between new console versions down to 2-3 years, it's always going to be like this. And I doubt that will happen because then they'll have to deal with the other PC version problems like upgrades, compatibility, and user-swappable parts. At that point you might as well buy a PC.

RE: Good times
By Reclaimer77 on 6/11/2012 5:28:59 PM , Rating: 2
Yeah PC gamers are such a niche man.

*logs into Diablo 3 to join the other 60+ million "niche" players*


RE: Good times
By dark matter on 6/12/2012 5:05:05 AM , Rating: 2
Yes 60 million out of how many billions of PCs/Laptops/Netbooks?

Niche is relative.

RE: Good times
By One43637 on 6/12/2012 1:04:54 PM , Rating: 2
I'm in the minority here. I'm still playing PC games, even though I have a 360 and PS3. But then again, I also build my PCs instead of buying them.

RE: Good times
By ET on 6/11/12, Rating: 0
RE: Good times
By amanojaku on 6/11/2012 12:03:17 PM , Rating: 2
You can still buy a 320GB HDD for a lot less than a 128GB SSD.
You can get a HD of at least 1TB for the cost of one 128GB SSD, but the average user doesn't need that much space. An OS + Office suite comes in around 25GB. Music is usually stored on the phone. USB sticks make extra space available at low cost (32GB for $25!), as well as providing data mobility.
I'm not saying SSD's don't have benefits, but I still don't see a reason for normal users to rush out an buy them.
Performance. The average SSD has random access times that are far lower than HDs. Grandma may not have 1TB of porn, but she'll notice when the HD needs a defrag. 30sec boot times are awesome.

Reliability is another concern. Solid state won't break as fast, theoretically, because of the lack of moving parts. Less noise, too.

RE: Good times
By retrospooty on 6/11/2012 10:22:38 AM , Rating: 1
"And it will cost me how many thousands of dollars to put all my movies on SSDs?"

I dont think you get how to use SSD's at all.

You put your OS, and apps on the SSD. Put movies and anything else that takes up large amounts of space on the secondary drive which is your old HDD. You can get a 120gb VVertex 3 at newegg for $100 these days. Totally cheap and totally worth it. The best "noticeable" speed increase that PC's have seen in a decade.

RE: Good times
By Boze on 6/11/2012 10:25:58 AM , Rating: 2
The people who actually visit this site are not the majority of the computing world.

Most of us got here from AnandTech, and you would have had to have been a technical / power user to start reading that site in the first place.

That said, I purchased six 2TB Western Digital hard disks from Newegg about a year and half ago. Maybe its been a little longer, I can't remember. All I know is that I'm glad I did. I pay $109.99 each for them, and they had a $20 mail-in rebate. Total price for 12 TB of storage was $539.94. The exact same drive I purchased is now $119.99 at Newegg.

My reason for purchasing them was pretty pathetic too, to be honest. I bought them simply because they were so inexpensive. I put 3 of them into my HTPC for DVR / Blu-ray offloading, and the other 3 went into my graphic design / gaming rig for photo / video storage.

Most consumers aren't going to build their own HTPC, nor are they are going to be doing heavy photo / audio-video editing either.

Seems like when I purchased my drives, Western Digital was actively trying to reduce stock with ridiculously low pricing (I think 2.5TB was the largest capacity when I bought these drives... maybe 3TB. There was certainly no 4TB drives available). I'm actually wondering if we'll see such aggressive pricing again this decade, once the shortage is resolved and production capacities are back to normal.

I imagine the HDD manufacturers are looking at this as a lesson learned.

RE: Good times
By retrospooty on 6/11/2012 10:41:21 AM , Rating: 2
"I imagine the HDD manufacturers are looking at this as a lesson learned."

I think its more a case of taking advantage of the situation. In the end it will come down to supply and demand. If they wind up with excess inventory (and at some point they will) prices will drop and drop fast. I highly doubt this will last until 2014.

RE: Good times
By Solandri on 6/11/2012 12:43:59 PM , Rating: 2
I think its more a case of taking advantage of the situation. In the end it will come down to supply and demand. If they wind up with excess inventory (and at some point they will) prices will drop and drop fast. I highly doubt this will last until 2014.

They're not taking advantage of the situation. The current situation is normal. The situation before the flooding was abnormal, with margins for HDD margins being razor-thin. A combination of too many manufacturers and rapid improvements in technology for the last decade meant they had to cut prices sharply on old stock to clear them out of the warehouses before they went obsolete. Good for the consumer, but simply not sustainable.

Now we've gone from about a half dozen manufacturers to just 3 (one of which only makes 2.5" drives), and the rate of improvement is slowing down (if you extrapolate old HDD improvement rates, we'd be seeing 10 TB drives about now). The industry has turned a corner, from a cutthroat growth industry with razor-thin margins, to a mature more steady one with margins more like other industries.

My only worry now is that we have too few players - their mergers were all started before the flooding. The merging was the market's response to try to correct the razor-thin margins. But the flooding took care of that for them, which means now there really isn't a need to have so few manufacturers. The lack of competition means it's going to take a while for HDD prices to fall. Before the flooding when HDD prices were too low, that was a good thing. After the flooding now that HDD prices are too high, that's a bad thing.

RE: Good times
By Boze on 6/11/2012 1:03:26 PM , Rating: 2
Solandri, thanks for the excellent post.

I don't know if retrospooty remembers what hard disk prices were like say, 8 years ago, but the situation just 2 years ago was exactly as you describe it.

As far as slowing down of progress, I'm not even sure if its really necessary.

If I were to eliminate my archived Blu-ray movies and TV shows, I'd free up 8 terabytes of space instantly. I could pop those discs into my Blu-ray player attached to my home theater or into my Blu-ray drive and accomplish the same thing, its just more convenient for me to have those files on the disk.

I'm sure there plenty industries though where 10 TB drives would be desirable. Biologists in particular seem to need a lot of storage space for data.

RE: Good times
By Etsp on 6/11/2012 11:09:48 AM , Rating: 2
I imagine the HDD manufacturers are looking at this as a lesson learned.
My understanding of it is the HDD manufacturers need the Rare Earth Metals that China has severely reduced exports on (for the raw materials).

If you want to manufacture something that uses them, it either needs to be made in Taiwan or China (China has a special exception allowing export of RE metals to Taiwan for the purpose of manufacture). I don't think the HDD companies are entirely to blame here...

RE: Good times
By lagomorpha on 6/11/2012 8:15:04 PM , Rating: 2
(China has a special exception allowing export of RE metals to Taiwan for the purpose of manufacture)

One is left to wonder if that is because of diplomatic relations or because China refuses to do anything that might suggest they acknowledge that Taiwan is a separate nation...

RE: Good times
By Reclaimer77 on 6/11/2012 5:24:32 PM , Rating: 1
Not sure why you used this argument or who the tech-illiterates were who rated you up, but this is idiotic. Using SSD's for mass-storage don't make any sense for the average consumer.

Do most people on this site understand your computer can run more than one storage device? Certainly hope so. Keep your movies on the HDD. Watch them on the SSD.

RE: Good times
By dark matter on 6/12/2012 5:13:11 AM , Rating: 3
Dear me, you wax lyrical about tech illiterate when it's blatantly obvious it's you who is illiterate.

Dear God Man, did you even bother to read what he wrote? Talk about comprehension fail.

Seriously, go away, pipe down, and actually bother to take the time to read what he wrote and then come back and apologize with your tail between your legs for being an utter tool and calling people illiterate for up-rating him.

You completely failed.

RE: Good times
By ultravy on 6/12/2012 12:29:53 PM , Rating: 2
"HDD Shipments Will Get Back to Normal in June 2012" this come on 27 april...Seagate’s Net Income Increases by 1200%... and there was no problem in Thailanda!!! is was only a strategy market, both companies having bigger income, and Seagate buy Samsung team, WD buy Hitachi...

RE: Good times
By ultravy on 6/12/2012 12:35:38 PM , Rating: 2

"HDD Shipments Will Get Back to Normal in June 2012" this come on 27 april...Seagate’s Net Income Increases by 1200%... and there was no problem in Thailanda!!! is was only a strategy market, both companies having bigger income, and Seagate buy Samsung team, WD buy Hitachi...

and confirmed

RE: Good times
By Mr Joshua on 6/15/2012 6:28:41 PM , Rating: 2
The idea is to run the OS and all apps and MS office docs on the ssd and keep all media files and a docs backup on magnetic media.

RE: Good times
By Brandon Hill on 6/11/2012 9:44:56 AM , Rating: 2
I was thinking the exact same thing. They are falling below $1/GB and some of the more mainstream models are well below that threshold.

The performance benefits are well worth the added cost vs a HDD IMHO. I recently installed two 128GB Samsung SSDs in two machines for a close friend at his office. One went into a Dell laptop (replacing a 320GB HDD) and one went into a Dell desktop (replacing a 160GB HDD).

The difference in performance was simply amazing. The desktop went from taking around 3 minutes to boot into Windows XP before the hard drive stopped churning and all the icons loaded up in the notification area to about 40 seconds.

The difference with the laptop wasn't nearly as drastic, but it was enough of a difference to make my buddy's jaw drop.

RE: Good times
By retrospooty on 6/11/2012 10:25:20 AM , Rating: 2
Absolutely. On a fresh install of Win7 its even better.

You know how the 4 colors of the boot animation on Win7 swirl around, then come together, flash/strobe for a bit and then you get to Win7, start menu and all? My PC with a not even fresh, fully loaded Win7 install boots before the 4 colors on the animation even come together. Apps launch equally fast.

RE: Good times
By SlyNine on 6/11/2012 11:16:44 AM , Rating: 2
The colors don't make it together on my acer. But yet my desktop with a much faster SSD setup takes a while longer. Probably because I have 16TB of HDDs.

RE: Good times
By xthetenth on 6/11/2012 5:59:00 PM , Rating: 2
On a fresh install of win 8 it's yet better. Who doesn't want a 4 second boot time? My laptop, if I turn I on before I sit down is at a password screen by the time I'm in a chair. I'm not even joking, my laptop has invoked the equivalent of Amdahl's Law with its password screen.

RE: Good times
By BZDTemp on 6/11/12, Rating: 0
RE: Good times
By bug77 on 6/11/2012 10:27:33 AM , Rating: 2
Regardless, you still need a HDD to actually hold your data.

RE: Good times
By SlyNine on 6/11/2012 11:19:49 AM , Rating: 2
I think many people could get by on just 120 gigs, if not then 240 would be enough for >80% of the users out there.

RE: Good times
By bug77 on 6/11/2012 12:19:46 PM , Rating: 2
It could, but I'm in Europe and in my country you can't buy two 240GB SSDs with the average income. So, believe it or not, they're still expensive.
And then there's thing, if I spend premium cash, I expect a premium experience, not to nickle and dime where each file should go.

RE: Good times
By stardude692001 on 6/11/2012 4:41:59 PM , Rating: 2
only if you count business computers.
people with laptops and netbooks sure, they only use office and a web browser. I have to think though that most people with desktops use them for either games or music or movies or PORN, any one of those with the possible exception of music needs more than 120gb. If you were to say 80 could do with a terabyte them you have my support.

Samsung 1TB 7200RPM drive for $80 at Newegg
By SworDancer on 6/11/2012 10:31:44 AM , Rating: 2
From time to time Newegg offers the SAMSUNG Spinpoint F3 1TB 7200 RPM HD103SJ hard drive for just $80 (which is the current price at the time of this post). Which is a great price! This is actually the hard drive that I use, and it's fantastic! It's the best hard drive I've ever owned.

By SlyNine on 6/11/2012 11:21:49 AM , Rating: 2
I bought a 2TB one in early to mid 2010 for about 20$ more. $80 for 1TB certainly isn't that great a deal.

RE: Samsung 1TB 7200RPM drive for $80 at Newegg
By raabscuttle on 6/11/2012 12:09:48 PM , Rating: 2
And geeks is $99.99 for 1.5TB new Seagate. I think prices may fall faster than many expect.

By lagomorpha on 6/11/2012 8:08:59 PM , Rating: 2
One would hope for the sake of the harddrive companies you are right. If harddrive prices don't return to antediluvian levels earlier than expected than sub $200 480GB (big enough for most) SSDs are going to be very difficult to compete against.

Not to mention 240GB (big enough for many) will be around the $100 mark in 2014. As flash gets cheaper to produce at every die shrink and economies of scale push the price of SSD controllers down expect to start seeing 128GB SSDs cheaper than new HDDs of any capacity because all those mechanical components can only be made so cheaply.

It's the economy...
By WinstonSmith on 6/11/2012 10:33:51 AM , Rating: 1
"HDD Prices Not Predicted to Return to Normal Until 2014"

Assuming no worldwide 2008 Lehman-like financial system event, which is an incorrect assumption. We are headed to one that's even worse in 2012, 2013 at the very latest. HDD prices will then be below normal.

RE: It's the economy...
By lagomorpha on 6/11/2012 8:11:05 PM , Rating: 2
If you have insider information do share, otherwise you sound like a cross between a crackpot and a weather man.

RE: It's the economy...
By Boze on 6/11/2012 11:24:47 PM , Rating: 2
He's talking about the United States' climbing debt-to-GDP ratio. We're at about 104% last time I checked. Greece was at 140% when it defaulted on its loans and asked for bailouts.

The United States is too big to bail out, so if we don't cut federal spending and lower the deficit, then we run the risk of no one buying our bonds, which is already happening sadly. On top of all that, no one wants to lose entitlements, so politicians are stuck between a rock and a hard place because the only solution is austerity, and you can look to Greece to see how well that's working out.

Even Rand Paul's budget wouldn't zero out our debt until 15 years from now or so, which would either be too late, or would leave the economy sluggish for an awfully long time. On top of that, its so aggressive that neither Republicans nor Democrats can get behind it.

And trust me, while this guy comes off alarmist, he's not really. There's a reason Mitt Romney sold all his American stocks and holds only stock in Marriott companies that operate internationally. Two reasons actually, the Marriotts are long-time family friends, and if the United States defaults on its debt, then you aren't going to want to own the stock of an American company for awhile. He also started buying up tons of debt from countries with excellent debt-to-GDP ratios like Canada, Switzerland, New Zealand, and Australia. He also has a few million in Canadian dollars, which will hedge him against hyperinflation in America. He's not the only one doing this either. Why do you think Facebook's co-founder got out of this country? He's not stupid, he can read the writing on the wall.

By icanhascpu on 6/12/2012 1:03:49 PM , Rating: 3
HDD prices are already starting returning to what they were. 2014 is a bit far off. I'd give in another year.
This is all great for the consumer though, because its accelerating adoption of SSD. SSD is dropping in price and expanding in storage space (and thereby they $ per GB is dropping faster) than HDD.
HDD is the new floppy disk now. In two years I predict 2TB SSDs for roughly $349 on SATA IV crossing the 1GB/s sequential mark. HDD may well be reaching 6-8TB by then, but a simple matter of cost is going to drive them out of the market. Its going to become far cheaper to produce these as the flash chip fabs pay for themselves. Every year the price is going to stay the same for roughly twice the capacity.
By 2020 these things are going to be so quick, RAM and SSDs will start to be reduced into one non-volatile storage facility sitting with out kids telling them about the time when storage used to be put on these small metal disks that would rotate seven thousand times per second in the snow uphill both ways!

By TakinYourPoints on 6/11/2012 2:57:32 PM , Rating: 2
In the meantime, SSD prices have dropped like crazy. You can get a Crucial M4 512GB for $400 now. I put one in my laptop and it is great. Had I not purchased an Intel 256GB SSD last November, I'd throw one in my desktop as well.

Monopoly power!
By freaktmp on 6/15/2012 6:30:02 AM , Rating: 2
Aren't monopolies great?

The manufacturers consolidate and the consumer takes it in the rear.

"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein
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