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By | Paul Kunert 21st October 2011 15:59

Thai floods flush storage channel clean

Disties hit the brakes, stores raise prices

Distribution giant Computer 2000 has put disk drives on manual allocation to spread supply among its customer base while other distributors have completely frozen sales while they review the impact of the flooding in Thailand.

The Far East country has been hit by the worst flooding in over half a century, with the world's largest HDD players – WD and Seagate – warning of severe product restrictions.

"Obviously this is a situation where product is restricted and under the circumstances we are endeavouring to spread the limited quantities that we've got to satisfy the customer base," C2000 UK boss Andy Gass told The Reg.

"As a result, we've had to put disk drives onto manual allocation," he added.

Resellers have contacted The Reg to say that other distributors have also removed all volumes from the Electronic Data Interchange (EDI) to prevent profiteering by the largest resellers, which could hoover up stock.

"I think this has created panic buying," claimed the reseller source.

A spokesman from Ingram Micro said: "We are working closely with our suppliers to review the situation and hope to provide consistent supply to the channel."

Price rises at source are inevitable: WD said as much during its conference call with analysts this week as it has suspended production in Thailand, which accounted for 60 per cent of manufacturing capacity.

Last night Seagate warned that prior to the floods the total available market expectations for unconstrained demand was 180 million units.

"Based on our current assessment of the external component supply chain, we expect to ship between 40 million to 50 million in the December quarter," said Seagate CEO Steve Luczo.

Price rises are already happening in some corners of the market; eBuyer has bumped up its prices by 10 to 20 per cent across the range with WD and Seagate at the sharp end of that.

David Woods, commercial director at eBuyer, said this was based on trying to prevent resellers buying up stock and sitting on it until manufacturers raise theirs "and our main focus is on making sure consumers have access to products".

Rival etailer is still evaluating the situation but has "decent stock levels" said boss John Thornhill – who also heads up BT Engage IT.

"Leading into Christmas, HDD and other components are good lines," he said.

Disk drives underpin myriad technologies and, with all major OEMs vying with the channel for stock, disk drives look likely to be precious this Christmas rather than just a commodity. ®

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