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The worst is yet to come for the HDD industry

Massive flooding ravaged Thailand late last year. The problem for storage vendors such as Seagate and Western Digital was that much of the hard drive production that supplies the computer technology world is done in Thailand. The flooding meant many employees were unable to get to work, and many factories were damaged by high water significantly impacting production.
 
Analysts predicted the computer industry wouldn't see the worst of the storage shortages until this year. Seagate has confirmed that the analysts were in fact correct. Seagate is saying that its shortage of hard disk drives will continue throughout 2012 and supply will continue to fall short of demand, pushing prices up across the technology industry.
 
Seagate notes that in 2012 it expects a HDD shortage of about 150 million units. Those estimates are in line with analysts' predictions. Seagate competitor Western Digital has also announced that it doesn't expect HDD production to reach the same levels as before the flood until the third quarter of 2012. Estimates claim the industry was only able to ship 119 million HDD units in the quarter that ended December 2011, while demand was for 175 million units.
 
Seagate was able to ship 47 million units in the quarter ending December 2011, a decline of 4% from the same quarter in 2010. The decline in shipments was blamed on a shortage of components.
 
The major HDD manufacturers including Seagate and Western Digital have shifted as much production to unaffected facilities in other countries as possible. Other than facing damage to their own facilities HDD makers are also facing component shortages since many manufacturers that the major HDD suppliers rely on are also unable to produce components. Seagate plans to hold an auction for about 200,000 storage drives later this week to gauge demand.
 
Late last year, Seagate announced that it was cutting back on the standard warranty for a number of its hard drive families. Not surprisingly, Western Digital soon followed up with its own cuts.

Source: Computerworld





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