Thai floods to disrupt PC shipments in 2012
Continued flooding in Thailand is limiting the nation's hard-disk drive (HDD) manufacturing capacity and this component shortage is expected to impact PC shipments into the first half of 2012, according to a new report.
IDC noted on Thursday that "in a worse case scenario", total PC shipments in the first quarter of 2011 could drop more than 20 percent from previous forecasts due to the shortage of HDDs, but it is already clear that there will be HDD supply shortages next year. The extent of the impact from Thailand's floods will not be known until floodwaters recede however, it added.
According to the research firm, Thailand produced 40 percent to 45 percent of the world's HDD in the first half of 2011. As of early November, nearly half of this capacity was affected by the flood and the industry is forced to halt work due to poor access and power outages, it said.
Impact on this quarter's PC shipment will be limited as a large part of the production has taken place or can be fulfilled with existing HDD inventories, it added. However, the following quarter will see HDD prices increase as demand exceeds supplies and manufacturers face rising component costs, it said.
"In response to the crisis, priority will be given to the large PC manufacturers that drive HDD shipment volumes as well as to the high-margin products used in enterprise servers and storage," said John Rydning, IDC's research vice president for hard disk drives and semiconductors.
That said, vendors cannot neglect smaller customers as these businesses will continue to be important when production capacity is fully restored, he added.
IDC expects the HDD industry to recover in the first quarter of 2012 and prices to stabilize by June.