In 2011 Thailand was hit by substantial flooding, causing vast damage to homes and manufacturing plants. One of the areas that suffered was hard drive production. Up to half of the global supply of hard drives is produced in Thailand and the government were unable to provide speedy relief for the victims. The government stated that they hoped to have factories producing again in three months’ time, but it would take a lot longer for them to return to maximum output.
As a result, the price of hard disk drives rose substantially. Asus’ chief financial officer said around the end of October 2011 that their supply of HDDs would run dry by the end of the next month. They predicted that it would not only affect component shipments, but also notebook and desktop production.
To see the price hikes, you only need to look at Newegg’s reactionary changes just after the flooding. For example, the Hitachi Deskstar 7K3000 rose from $180 to $399. This was a problem in the market because there isn’t a great, similar costing alternative for a HDD. Although SSDs are an increasingly popular technology, they still don’t offer the same storage capacities and they come at a far higher price.
Happily, however, 18 months after the floods, it seems that hard drive prices have returned to normal. Dynamite Data is a business that monitors e-commerce data in real time. They are capable of understanding price changes across the internet, rather than just looking at a select few products. Studying the data shows that just before the flood, HDD price per GB was below $0.055. That shot up to above $0.0995 after the flood. That’s more than a 70% increase.
Drives remained at those high prices for around a month, but they’ve slowly been dropping down to the normal rate. In March 2012 they had just dropped to around $0.065 per GB. A year later and they are now between $0.05 and $0.055, the standard price for hard drives. It’s unlikely that they’ll go any lower unless a new technology (like Western Digital’s testing of helium hard drives) comes onto the market and threatens their podium. If you’re in the market for a new hard drive then there’s never been a better time in the past couple of years to get one.
Some did accuse drive manufacturers of riding on the post-flood pricing at consumer detriment (as it secured strong profits), but a lot of them used the situation to begin phasing out their less popular product lines. Instead, they’ve changed focus towards drives that are smaller and have higher density storage platters.
If the Thailand flood shows anything, it’s that manufacturers shouldn’t base the majority of their production all in one country. Not only does it affect them negatively (in the case of Asus not having enough components for their computers), but it also has a knock-on effect for consumers having to fork out the higher prices.
In summary, those looking to upgrade their business’ storage facilities will find that now is a great time to do so.
Hard Drive Pricing After the Flood
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