Hard drive shortage persists

Western Digital, one of the world's largest hard drive manufacturers, says it will only reach full production in the third quarter of the year, three months later than when the market expected supply to normalise.

The company says it has made significant progress in restoring its manufacturing capacity, after flooding in Thailand last year.

Thailand accounts for about half of the world's hard drive production, but several factories had to close up shop for weeks as facilities were under water after flooding during last year's monsoon season, which was the worst in about 50 years.

In the first half of the year, Thailand accounted for between 40% and 45% of worldwide production, but, by early November, nearly half of this production was affected by floods, IDC has said.

The research company says production has been disrupted at more than 12 hard disk drive factories. As a result, production of drives and other key PC components has come under pressure, leading to a global shortage and hard drive prices more than doubling in the local market.

Western Digital (WD) president and CEO John Coyne says: “We have made substantial progress in restoring WD's manufacturing capabilities in the aftermath of the historic flooding in Thailand.” Much work remains to be done, but the company's progress is ahead of its initial expectations, he adds.

Seagate, another global giant in the hard drive space, says while shipments are improving, demand is expected to exceed supply for the entire year.

It says the sector, excluding Seagate, saw supply drop 40%, while its unit shipments fell 9% in the period to December as its geographically diverse supply chain mitigated the effect of the floods.

Although the company's Thailand plants have mostly been unaffected by the floods, production has been impacted because of shortages in components from its suppliers that were hit by the disaster.

Christopher Riley, MD of The Notebook Company, says the local market has been impacted by the shortage as the prices of PCs have not come down as would typically have been the case. He says hard drive prices have gone up by about 70% since the floods hit supply.