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Hard drive production return to normal after Thailand floods?


Dave
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Great article over at storagenewsletter.com.

 

Tim Leyden, WD's COO, said yesterday in an EMEA press conference in Wien, Austria, that there is a lot of progress on flood recovery efforts: "We are now capable of adequately meeting anticipated customer demand in the current quarter and beyond. We are well on our way back to full health."

 

Source: http://storagenewsletter.com/news/disk/map-consequences-thai-flood-hdds

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Doesn't mean prices will follow unfortunately.

 

Yeh, I'm sure they used the Flood's as opportunity to "retire" the excess production capacity that had been driving down prices.

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IMHO, the big issue that's going to affect price drops is competition or, rather, the lack of it. There used to be a lot more players in the HDD field. Now it's basically down to 2 major ones. Unless some 3rd company sees an opportunity to gain market share and low-balls prices; forcing the big guys to follow suit, we may not see prices drop to pre-flood levels.

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Guest no-control

competition isn't really going to impact it as much as demand. Demand has been suppressed for quite some time and there isn't a reason to over produce lower capacity drives (<1TB) in any number. Which will keep the high capacity drive prices inflated a bit. I think $99 is the new 2TB from here on out. Until 4TB and 3TB become the new norm, if at all, expect 2-3TB to be more than pre-flood. Who was competition for the big 2 pre-flood? Certainly not Hitachi, maybe Samsung, but barely. The production/sales numbers for both were fractional, and their margins just as slim. There was a reason they were sold off.

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One thing about rebuilding inventories is the producers can now control supply and somewhat control price. I do agree that if 3 & 4 TB drives now become the standards for production, the $99 price for 2TB is pretty much the norm however the larger drives will start to trend downward in price. Hindsight! Always good.

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competition isn't really going to impact it as much as demand. Demand has been suppressed for quite some time and there isn't a reason to over produce lower capacity drives (<1TB) in any number. Which will keep the high capacity drive prices inflated a bit. I think $99 is the new 2TB from here on out. Until 4TB and 3TB become the new norm, if at all, expect 2-3TB to be more than pre-flood. Who was competition for the big 2 pre-flood? Certainly not Hitachi, maybe Samsung, but barely. The production/sales numbers for both were fractional, and their margins just as slim. There was a reason they were sold off.

 

I look at it as a symbiotic relationship: when prices doubled (or more than doubled) after the flood, demand dropped. If someone steps up and starts offering 2TB drives for $69 I believe demand will increase dramatically. I agree that Hitachi and Samsung were sold for a reason. But they were also bought for a reason: their mere existence was an impediment to higher prices. IMHO, they were bought to eliminate the threat, not because WD or Seagate needed the capacity.

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