Flooding in Thailand = expensive computer hard drives.

Miscellaneous and Personal Stuff I Must Share
1

I was reading a news story the other day about the massive flooding they’ve been having in Thailand recently. It seems like most of the country is underwater. Because the floodwaters rose slowly, deaths and injuries have been fairly limited, but it is still a huge humanitarian crisis as people lose their homes, their land, their jobs to the rising waters.

Anyway, quite a few stories noted that a considerable portion of the world’s computer hard drives are produced in Thailand, and flooding has shut down quite a few of the factories where these drives are produced. Industry experts are predicting a hard drive shortage over at least the next quarter, and probably longer, with consequent rising prices.

I had been thinking recently about grabbing another drive or two for backups or storage, so i went to my favorite computer retailer, NewEgg, to check out the situation. The reports of shortages and price rises didn’t worry me too much, because hard drives have become so cheap that i figured an extra 10 or 20 bucks wouldn’t be too much of a problem.

Well, it’s not just 10 or 20 bucks. Hard drive prices at quite a few retailers have gone through the roof.

Back in January, i purchased three Hitachi 1TB drives from New Egg for $54.99 each. Check out the price for the EXACT SAME drive now. And there’s a limit of one drive per customer. Holy shit! Hard drive storage has jumped from about 5-8c per GB to about 16-20c per GB.

Other retailers like amazon and TigerDirect seem to be bumping their prices too, although how much depends on the drive and, in the case of Amazon, whether it’s an Amazon product or being sold through one of their merchants. Still, there’s a clear and quite significant price rise across the board.

While my need for another drive was far from critical, i did want to see if i could grab one at a decent price before the real shortage begins to hit. In the end, my ever-reliable camera retailer, B&H Photo in New York, was the solution. I found a 2TB Western Digital for $109 plus $9 shipping. It’s a Green version, with a slower spin rate, but as it’s only for media storage that doesn’t matter anyway.

2

OK, i’m going to bump this once for the weekday crowd.

There must be someone who is interested in how a natural catastrophe halfway around the world is going to affect our ability to store our songs and movies. :slight_smile:

3

Forgive me for being cynical, but I doubt the price increase is entirely due to the situation in Thailand. Hard drives are made in any number of countries. I have a pile of hard drives right here, let me check:

[ol]
[li]Thailand[/li][li]The Philippines[/li][li]China[/li][li]Singapore[/li][li]Thailand[/li][li]Thailand[/li][li]Thailand[/li][li]Thailand[/li][li]Malaysia[/li][li]Singapore[/li][li]Thailand[/li][li]Singapore[/li][/ol]

So, half of them (mostly Western Digital) were made in Thailand. I realize this is not a scientific survey, but Thailand is NOT the world’s only source for hard disks.

It looks like perfectly ordinary capitalist price gouging to me, like when memory prices skyrocketed a few years back because of a fire in one plant.

4

The flooding in Thailand affects my job directly. The guy across the hall is having to deal with the hard drive shortages. I have to deal with other component shortages.

Nikon, Sony, Canon, Honda, Ford and Toyota are among the well known companies with factories closed.
I think we are only starting to see what is affected by the flooding. In addition to the companies that make the end products, companies that make parts are also being closed. So even if your final assembly isn’t in Thailand, some of the parts you need may be coming from there. Some of these companies are talking about their factories being closed for up to 6 months.

5

Here is an article about this. Among other things, it says, “Consumers worldwide could see increases of at least 10 percent in the price of external hard drives because of the flooding, according to Fang Zhang, an analyst at IHS iSuppli, a market research company. The effect will be less noticeable for laptops and desktop computers, he estimated, because demand has been weakened by the current global economic malaise.” So it is now suggesting as large a price increase as the OP mentioned. And I don’t quite understand why there would be much of a difference in the price of external vs internal drives. They’re the same thing, up to the point where they’re placed in an external enclosure, so there should not be much of a price difference.

6

Well, gaffa, there are a few issues here that complicate things.

Firstly, Thailand is, according to the stories that i have read, the source for about 40% of the world’s hard drives. So, as you say, it’s not the only source, but it is a significant source, and any industry that suddenly loses up to 40% of its capacity will likely see a rather dramatic (temporary) supply deficit.

But there’s also the issue of who those drives get shipped to. A couple of stories suggest that the hard drive manufacturers will fulfill their large orders from computer manufacturers (Dell, etc.) first, and that shortages will probably be greatest in precisely the area that i discussed in my OP – people buying individual drives from retail outlets like NewEgg, Best Buy, etc.

Finally, as alluded to by Tastes of Chocolate, even drives not listed as being manufactured in Thailand often have parts that were made there. For example, a company called Nidec makes spindle motors for hard drives, and is the main supplier of this component for drives made in a variety of countries. Nidec is located in Thailand, and has also been hit by the floods, so even companies that don’t make their drives in Thailand will be affected if their component suppliers are in Thailand.

7

Your list is about right. About 50% of the worlds production of hard drives comes from Thailand. Yes, it’s all about the factories closing in Thailand. If you have a demand for 100 of something, and 50 of them don’t get made, what do you think happens to the cost of those 50?

Western Digital and Toshiba ave been flooded. Seagate and Hitachi are not flooded but have shut down some facilities.

I’m wondering if this will speed up the transition from HD to solid state drives.

8

I was in MicroCentre over the weekend looking for a new hard drive. Everything on the shelf had its priced blacked out – if you wanted to know what it cost, you had to ask a sales associate. There were also signs saying there was a two per customer limit. According to the salesperson, it was all the fault of Thai floods.

9

They do it in part because they can, the other problem is manufacturers like Dell, Apple, etc.

Many of them have contract prices for a steady supply of X drives per month at $X each. Failure to fill order = breach of contract and MFR sends out the attack lawyers which means they get first crack at the supply leaving us “boutique” operations to fight over the scraps.

Also in this wonderful world of JIT and lean manufacturing nobody keeps more than a few weeks of raw materials on hand. Even with priority treatment I bet the big names are shitting frisbees right now as to the integrity of their supply lines.

If I had known this was coming I would have bought up every 500GB-1TB hard drive I could find and could easily be turning a $30-$50 profit on each one via amazon.

10

I just checked my usual sources and prices have gone up over 150% for 2 TB drives.

11

Another issue is that manufacturers of components for hard drives are also affected
IIRC the largest HD motor manufacturer (something like 60% world market) has been requalified as a fish farm.

Also rice prices are bound to soar, one from the loss of crops, and two for a whooping subsidy by the new Thai government that pretty much doubles the market price millers get paid per tonne and thus the government in turn will try to sell it in the international markets at a higher price.

12

Think it sucks for you? At work we have a Windows 7 upgrade project that will involve upgrading tens of thousands of PCs, about half of which we need to buy new hard drives for. The tripling of hard drive costs is going to cause a bit of re-budgeting!

13

Jesus. Even the sub-1GB drives are well over $100. Time to throw some old hard drives on eBay.

14

Yeah, this whole situation blows - I have a home server that I recently upgraded, and at the time, I was debating buying another 2TB drive, in preparation of reripping my DVD collection to uncompressed ISO files (right now they’re all highly compressed m4v files). I thought, “Naaaah, I can always pick up a new hard drive when thye go down a few bucks.”

This was when 2TB drives were selling for $around $100 - now they’re running at least $200, $250 or more for my preferred brand, WD Caviar Black. What a pisser.

15

Has anything similar happened in the past? Thoughts as to when prices will normalize? I suppose this is going to impact Black Friday/Cyber Monday/Festivus Thursday-After-Next. My pa just bought a computer; good thing he didn’t wait the extra month.
Given the relative differences in shit-fan-hitting, has anyone thought to post this in the First World Problems thread?

16

I seem to remember the RAM market being taken by surprise a few years ago by a typhoon or something swamping one or more of the main chip plants, but I can’t remember the details. But RAM has always been a more volatile market, while hard drive prices have continually fallen over the years - I can’t recall such a marked increase in the price of hard drives before.

And yeah, I was thinking, if anything is a First World Problem, it’s: “Waaaah! Now I can’t rip my DVD collection!” It underscores the fact that I’m incredibly lucky if my worst problem is that I have to deal with compression artifacting. The poor folks who are most affected by this not only are out of a job, but likely displaced from their homes as well.

17

Yeah, about 6 months ago I bought several 3 TB hard drives for $130 each. Same ones are exactly double the price now. I wanted to buy a bunch more for work, but I can’t really justify it at these prices.

I’ve read that the floods have actually destroyed a bunch of machinery–it’s not just that they couldn’t work during the downtime. Could be a while before prices come down.

18

Obligatory nitpick: the southern provinces are pretty much fine. It’s really the areas immediately to the north of Bangkok that are in trouble, which while a terrible disaster isn’t quite “most of the country” (Map here). Unfortunately the provinces that are worst affected are the ones with most of the industry. :frowning:

19

I deal with alot of small and micro businesses. People who make a $20K a year working from home and such. Increasing the price of a repair on a computer they use to do freelance medical transcription can be crippling.

20

Obligatory nitpick: i was using hyperbole. :slight_smile: