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By | Phil Muncaster 24th February 2012 16:33

Flood-hit Thai disk fabs to pour out 140m drives

Factories running full tilt amid high prices

The production of hard disk drives is nearing full capacity after flooding last year in Thailand sent shockwaves through the supply chain, with output set to reach around 80 per cent of pre-flood levels.

A Digitimes report, citing industry sources, claimed that production would increase to somewhere between 140 and 145 million units in the first quarter of 2012.

It said that HDD makers ran out of products and components in December and January but have been spared due to the off season. The sources also told Digitimes that Hitachi Global Storage Technologies and Seagate Technology were less affected by the floods and have therefore been able to get back to normal quicker than rivals such as Toshiba and Western Digital.

Market analyst IHS iSuppli said last week that high prices and low supply would continue to plague the industry for some time to come. Global hard drive shipments fell by 26 per cent year-on-year in the final quarter of 2011 and will drop by another 13 per cent in Q1 2012 and by 5 per cent in the second quarter on an annual basis, it predicted.

Hundreds died in the widespread monsoon flooding which affected large swathes of Thailand last October and thousands of factories were forced to close.

This not only impacted the HDD market – with Thailand the biggest producer of hard disk drives outside of China – but is also predicted to have a knock-on effect on the notebook PC and DRAM market, iSuppli said.

It could even offer solid-state drive vendors an opportunity to grab a bigger slice of the pie as disk prices rise beyond flash.

The floods have been blamed by several tech giants for contributing to poor financials since they struck, with Dell claiming this week that the short supply of drives had put margin pressures on its PC business.

In more bad news for the longer term, Digitimes’ source predicted that HDD prices would probably rise from 30 to 40 per cent from pre-flood levels due to the knock-on effect of the increased cost of components and materials. ®

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