HP and EMC warn of hard-disk price rises

HP and EMC customers can expect to pay more for hard drives in the new year as the companies seek to pass on the rise in prices caused by flooding in Thailand.

HP and EMC have warned they will have to pass on price rises on hard drives in the new year, after floods in Thailand hit supply. Photo credit: Thor Jorgen Udvang/Shutterstock.com

Both companies can no longer swallow the hard-disk drive (HDD) price increases caused by the flooding, EMC and HP told ZDNet UK on Tuesday.

"To date EMC has absorbed the price increases passed on to us by our hard-disk drive suppliers and we will continue to do so through the end of the month," EMC said. "However, beginning in Q1 2012 we will be increasing hard-disk drive list prices from five percent up to 15 percent for an indefinite period of time."

HP did not give a date for when its prices would go up, but said it would be forced to raise prices as well. HDD component prices have already risen by 20 percent, it said.

"We often adjust prices we charge for components based upon market conditions, and this situation is no exception," HP said in a letter circulated to its customers on 21 November, and shown to ZDNet UK by HP on Tuesday. "What is different now is that some of these component prices may rise significantly, and for an indeterminate period of time."

The flooding has led to severe shortages in HDD components, meaning that large capacity SAS and SATA drives are already in short supply, HP said.

In early November market research company IHS iSuppli predicted the floods would lead to "a significant shortage" of HDDs. 

"Operations at many hard-disk drive factories in Thailand have been disrupted. According to IDC, Thailand accounted for 40-45 percent of worldwide HDD production during the first half of 2011," HP wrote. "Many factories have been flooded, and in others production has been impacted due to power outages and work stoppages."

Major hard-drive manufacturers Seagate and Western Digital recently slashed the warranties on their HDDs. Western Digital said this was unrelated to the floods that severely damaged its manufacturing facilities, but IDC analyst Daniel Bizo disagreed.