Hard Disk Drive, PC Shipments Impacted by Thai Floods: IDC
Vendors should expect higher HDD prices as demand exceeds supply and manufacturers face increased costs for components.With operations disrupted at more than a dozen hard disk drive (HDD) factories, damage to the HDD industry is significant, due to widespread flooding across Thailand. According to a report from IT analytics firm IDC, this will have a direct impact on worldwide PC shipments through the first half of 2012.
The report said the severity of HDD shortages in the coming months largely depends on the industry's ability to recover lost production capacity in Thailand. While IDC said it believes HDD industry participants will recover and restore HDD production capacity relatively quickly, HDD supply will remain constrained for an extended period of time. As a result, PC vendors should plan for and expect "significant" HDD shortages by mid-November that will continue into the first quarter of 2012. A large part of PC production for Q4 2011 shipment has already taken place or can be completed with existing HDD inventories, limiting the impact on fourth-quarter PC shipments to less than 10 percent. But in a worst-case scenario, IDC projected total PC shipments could be depressed by more than 20 percent in Q1 2012 versus previous forecasts as a result of the HDD shortage.
Vendors should also expect higher HDD prices as demand exceeds supply and manufacturers face increased costs for components, expedited shipments and shifting of production to new locations. The firm said the HDD industry will begin to recover in the first quarter of 2012, and HDD pricing will stabilize by June, with the industry running close to normal in the second half of 2012. There will be opportunities for larger PC vendors to capture enterprise accounts from smaller competitors and accelerate industry consolidation, particularly in faster growth markets.