Nearly four months after the Thailand floods, which created acute shortage of disk drives globally and saw prices shoot up by as much as 300 percent, the prices have now started falling. While most industry leaders still feel that it would take another two quarters for prices to go back to pre-October 20, 2011 prices, they are hopeful that by March-end, the supply would outstrip demand.
The bulk price of a 500 GB SATA drive, which rose to $110, dropped to around $65 on February 8, 2012 in major spot markets. “I am expecting that in a week prices of 500 GB drives may drop below Rs 4,000, which would be a big relief for the system builder market,” said S Sudhir, MD, Inspan Infotech.
The prices of 1 TB HDD has also dropped to less than $90 from the highs of $135 in early November 2011.
The drive shortage had affected even enterprise vendors. “Drive shortage affected the entire market. We now see things definitely improving,” said Laura Guio, Vice President, Storage STG, Growth Market Unit, IBM.
Shortage even forced Lenovo to postpone shipments for the Elcot order. “We are hoping to make confirmed deliveries this quarter. The drive shortage is easing up, and there is availability albeit at higher prices,” said Rajesh Thadani, Director, Consumer Business Unit, Lenovo India.
Earlier, research agency iSuppli reported that by end of December, the manufacturing industry in Thailand resumed operations and production returned to normal output. But the report also said that there was short fall in production of hard drives by 20 million units in Q4 2011.
Channels also had earlier complained that several brokers, hoarders and distributors took advantage of the situation creating acute short supplies, to increase prices. “Now that prices are sliding, there could even be panic selling, which would further help bring the prices down,” says Sudhir.
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