Thailand has been bailing out of its rainy season, but the flooding in some areas has been severe. Considering the country produces 25% of the world's hard drives, and two substantial manufacturers — Seagate and Western Digital — operate there, the tech industry may need some bailing out too.
According to CBS News, analysts speculate that the rising flood waters could not only damage these companies' market share, but lead to a shortage of disk drives. For our readers, this could mean fewer deals.
30 Million Fewer Hard Drives Since August
In the last three months, the flooding in Thailand has killed more than 317 people and made a $3 billion dollar dent in their economy. With production at a halt in 14,000 factories, and others operating at a fraction of their capacity, market research firms estimate that the industry has seen 30 million fewer hard drives since August. According to ZDNET, Western Digital was hit particularly hard, while Seagate is still fully operational but will encounter disruptions as they're faced with shortages for the components they need.
Projected Effects from the Shortage
With a decreased supply, there's a good chance that prices for hard drives will go up. Or, at the very least, rock-bottom deals will be harder to come by.
Apple's CEO, Tim Cook, anticipates that there will be an overall shortage of disk drives, and Apple's Mac line is likely to be affected. We've also already seen signs that vendors may shy away from offering promotions; Mirco Center advised via its Facebook page that it has suspended its promotions for Hitachi hard drives due to the unexpected supply disruptions.
However other industry experts aren't as fearful. John Rydning with IDC told CBS News that the hard drive sector seemed to recover rather quickly after the Japanese earthquake in March 2011, and that the industry is "highly redundant and remarkably resilient," because its plants are located throughout Southeast Asia. Stacy Smith, CFO of Intel, also believes that a "combination of alternate supplies and inventory levels" will carry their production through to the end of the year.
How will this hard drive shortage affect you? It's difficult to say since the industry is expected to be in disarray for several months to a year. What we do know for certain, however, is that it's an especially good time to be shopping carefully for a deal. [CBS News]
Front page photo credit: MyService.com