Thailand's floods will cause a shortage of hard drives
Summary: The catastrophic flooding in Thailand will lead to "a significant shortage" of hard disk drives, according to IHS iSuppli, A US-based market research company. This will cause HDD prices to rise by about 10 percent in this year's fourth quarter.
The catastrophic flooding in Thailand will lead to "a significant shortage" of hard disk drives, according to IHS iSuppli, A US-based market research company. This will cause HDD prices to rise by about 10 percent in this year's fourth quarter. However, iSuppli believes there are sufficient stockpiles to avoid any disruption in the supply of notebook PCs.
In its news release, Thailand Flood Exerts Broad Impact on Electronics Supply Chain, IHS iSuppli says: "HDD shipments in the fourth quarter will decline to 125 million units, down 27.7 percent from 173 million in the third quarter." It adds:
"The downturn will be spurred by production disruptions and stoppages at the manufacturing operations of some of the world’s largest HDD makers -- namely Western Digital Corp and Toshiba Corp -- as well at suppliers of key components. Thailand is the world’s second-largest producer of HDDs after China and is a major supplier of hard drive parts."
As recently reported by ZD Net: "Thailand's disaster has shut down 14,000 factories, flooded hundreds of thousands of homes and put more than 660,000 out of work. The flooding has hit Western Digital hard, with chief executive John Coyne warning that its December quarter revenue will fall 60 percent from a year ago, as the company has a high concentration of supply chain factories in flooded areas."
Problems will, of course, extend far beyond the portable PC market. IHS iSuppli says that eight car manufacturers in central Thailand have stopped production: Ford, Mazda, Hino, Honda, Isuzu, Mitsubishi, Nissan and Toyota. In addition, "in the camera sector, the Thailand camera manufacturing operations of Sony, Nikon and Canon all have been disrupted or suspended by the flooding. As a result, IHS iSuppli anticipates that overall camera shipments will drop in the fourth quarter and possibly in the first quarter of 2012."
Japan will be hit because so many Japanese manufacturers -- around 1,800, says iSuppli -- have manufacturing operations in Thailand. However, the Taiwanese PC companies (Acer, Asus, MSI) and contract manufacturers (Quanta, Compal, Wistron etc) generally have factories in China.
Footnote: There are two stunning collections of news photos at The Big Picture, at the Boston Globe: Thailand flood reaches Bangkok, and at The Atlantic's In Focus, Worst Flooding in Decades Swamps Thailand.
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Talkback
The pictures look very dramatic, but do a search [Flood Phra Khanong] on Google, and it'll put things in perspective.
The first link (demotix dot com) has all dramatic pictures of people up to their necks trying to block the flood and failing, the 4th link (khiewchanta dot com) has videos of the same flood as it actually is, a few side streets flooded and then only a little.
There is under-capacity in the computer industry and so once the water has been drained they'll just run a few extra shifts to catch up.