Thailand flooding sends HDD prices skyward

Thailand is currently experiencing the worst flooding it’s seen in over 50 years, and the deluge is wreaking havoc on the PC industry. PC makers face the very real possibility of running out of hard drives, and they’re reportedly turning to the gray market to secure supply. Dwindling inventories have also pushed up the price of bare drives. We first noticed this effect when putting together our latest system guide, and it’s only gotten worse since. Here’s how the Newegg pricing of a handful of popular desktop drives has changed since the beginning of October.

Although some drives have been impacted more than others, the overall trend is clear. We’re looking at price increases in the 80-190% range, with the uptick beginning around the middle of last month. Now is definitely not a good time to be in the market for mechanical storage.

Those results only cover 3.5" desktop drives, but 2.5" mobile models are similarly afflicted. In fact, they may be in an even more precarious position as notebook makers scramble to ensure they have enough drives to put into systems.

The supply problems are expected to persist through the current quarter, which means we could see prices climb even higher in the coming months. Thailand faces much bigger problems, of course, and my heart goes out to the millions directly affected by the flooding.

Comments closed
    • brothergc
    • 8 years ago

    well with the prices these days the HDD retailers, etailers , and manufacturers are shooting themselfs in the foot because this will make SSDs more atractive . Once people see the difference they will never return to a mechanical drive

    • ronch
    • 8 years ago

    I guess it’s time to ease off your Torrent downloads a bit, men.

    • Draphius
    • 8 years ago

    seeing those prices makes me want to hock my WD black, and pickup a ssd boot drive. i can deal with slow storage till prices drop back down. anyone know a good drive cleaner program?

    • link626
    • 8 years ago

    looks like this year’s Black Friday won’t have cheap laptops

    • yogibbear
    • 8 years ago

    God dammit. Both my harddrives just reached full capacity (red zone) today… 🙁

    Will it only take a couple of months to get back to normal prices?

    • cygnus1
    • 8 years ago

    Although the price history graph is interesting, I bet another interesting graph would be to visualize the percentage price increase from 30 days ago. Maybe in a bar graph.

    That would more clearly let you see where supply of certain models or capacity points is being outstripped by the surge in demand.

      • UberGerbil
      • 8 years ago

      Other than perhaps some panic buying, there has been no surge in demand. It’s a constriction in supply. Almost certainly there was something of a temporal shift, as buyers — anticipating higher prices and/or limited supplies — moved up purchases from the next few months to right now. But that’s just a shift, not an increase, in demand; the surge has been in prices due to limited supply (real or anticipated).

    • tootercomputer
    • 8 years ago

    I suspect the prices will come down in a few months when production resumes. Good old supply and demand in the meantime. The flooding is truly horrendous. Intersting, there was no comment about SSDs.

      • UberGerbil
      • 8 years ago

      No comment about SSDs because the NAND fabs aren’t in Thailand, and presumably the final assembly isn’t either.

        • tootercomputer
        • 8 years ago

        Yeah, I figured as much. The flooding and supply shortages could set up an interesting situation where, a least in the short run, the price-capacity ratio for SSDs improves relative to that for standard hdds and really boot the former’s sales. This assumes BSOD and other bugs get resolved. I’m about to get my first SSD (due Monday) and I am struck by the homework I have needed to do to prepare for installation, i.e., firmware updates, resetting my bios to AHCI and installing the appropriate drivers, and so forth. Not sure how willing the non-enthusiast crowd would be willing to put up with all this, so maybe people will pay for the higher priced standard hdd. Geez, I’m looking at the 1TB black saviar at newegg and the price is now $219.00, Holy cow! That’s a $100 increase in the past few weeks.

        • just brew it!
        • 8 years ago

        Yup. Given that the primary issue appears to be the spindle motors, SSDs should be completely unaffected, other than maybe a small price bump due to increased demand from people who would’ve previously bought a HDD instead.

    • LoneWolf15
    • 8 years ago

    After buying three 1TB Seagates for the BB sale price yesterday ($66.49) I went back to buy the remaining three that were there tonight. All gone. Only the $60 500GB drives of that line are left (plenty of them).

    Interesting that the retail-boxed Seagates still carry the 5-year warranty, as opposed to the 2-year OEM one.

      • just brew it!
      • 8 years ago

      They’ve gone to a 2-year OEM warranty? I thought it was 3.

      [b<]Edit[/b<]: Yup, only 2 years. Everyone else still appears to be 3.

        • LoneWolf15
        • 8 years ago

        They have a few three-year warranties. Good luck finding them.

    • Krogoth
    • 8 years ago

    Looks like storing my HD pony p0rn collection is going to get very expensive…….

      • LoneWolf15
      • 8 years ago

      Figured you had a BluRay burner for that massive library of yours.

    • ShadowTiger
    • 8 years ago

    I just want to know, who is making the most profit off of these shortages? At first I thought it might be the vendors like Newegg but now I’m thinking it might be the component suppliers.

      • UberGerbil
      • 8 years ago

      It’s whoever has inventory bought at the cheaper prices that they can resell at the higher prices into a supply-constrained market. In the short term, that’s the people with inventories of ready-to-sell drives — whether that’s retailers, wholesalers, or the drive makers themselves — but then they have to turn around and refill their inventories by buying drives at the higher prices (and at some point when the factories come back on line and prices start to fall, they’ll have to make sure they’re not sitting on a bunch of expensive drives they can no longer sell at anything other than a loss). The drive makers of course have to refill their inventories by actually making more drives, and before they can do that they have to absorb the costs in getting the factories back online (even if they have some form of flood insurance, there will be uninsured expenses and most of the cost will be paid up front long before any policy pays out). And there will be some component suppliers — drive head makers in Hong Kong, for example — who will be sitting on expensive unsold inventory and idle factories while they wait for the HD mfrs to start needing their product again.

      It is true that if you’re able to keep your profit margin constant as prices climb, your absolute profit increases even when you’re not actually more profitable on a percentage basis. This is how oil companies make so much money as gas prices climb, despite facing increased costs themselves. But supply shocks generally get passed through to the consumer pretty quickly; or, put another way, the higher prices don’t reflect higher profit, they reflect higher costs. A big chunk of that extra hundred bucks (or whatever) you’re paying for a hard drive is ultimately going towards cleaning up and re-starting some factory in Thailand.

      There’s undoubtedly some speculation going on — folks snapping up drives they otherwise wouldn’t have purchased with an eye to reselling as prices climb, or merely restricting sales of the inventory they already have in anticipation of charging higher prices later — but as with most disasters, there’s not as much profit in all this as cynics like to suspect.

        • ronch
        • 8 years ago

        Spoken like a businessman.

    • paulpod
    • 8 years ago

    And all the money “saved” by outsourcing (single source, no less) these factories to an obviously unprepared third world country went right into the pockets of executives who are probably long gone.

    This whole system of allowing a few people to get rich on decisions that only make sense for the short term and letting them off the hook for the long term repercussions is why the world is broken.

      • Ushio01
      • 8 years ago

      Considering 300,000 hectares is under 3 meters of water and vastly more of the country is flooded at lower levels I’m not sure what they could do to prepare.

        • JustAnEngineer
        • 8 years ago

        It’s simple enough. They [i<]could[/i<] have pushed up a pile of dirt 3½ meters high before pouring the concrete slab for their factories and warehouses. Whether the site evaluation of the flood risk justified the cost of pushing that dirt into a pile is another matter. The people in New Orleans had three hundred years of experience with flooding of the low-lying area where they built their city. The folks in Amsterdam have been dealing with theirs for over eight hundred years. They both chose to push dirt into long levees around the city rather than to build up their foundations or place their homes on stilts.

      • eofpi
      • 8 years ago

      You’re conflating two separate issues.

      First, it’s irresponsible for an entire industry–any industry, from hard drives to motherboards to pencils to kumquats–to be concentrated in a single region. The storage industry, in particular, should understand the need for backups. That’s what’s responsible for this hard drive shortage.

      Second, executive compensation is skewed to favor short-term gains over long-term viability. I have some ideas for fixing that, but I don’t want to get lost on a tangent.

      Could the second have caused the first? Quite possibly. But acting as if they’re the same issue is misleading at best.

        • Peldor
        • 8 years ago

        On your first point, I think you have to have some acknowledgement for the extremely high cost of ‘backup’ production for 50 million hard drives. It’s a fairly competitive industry. You can’t turn a profit building backup plants or under-capacity plants just in case. Well you can, but then you are actually hoping for a cataclysm to screw the other guy before your high costs screw you.

        Now if it turned out that one of these places lost critical data because they didn’t have offsite backups, IRONY!

          • eofpi
          • 8 years ago

          I didn’t mean for them to have significant idle capacity elsewhere just for the sake of disaster survivability. I meant that, if you need to build a second plant, it makes more sense to put it in a different country from your other plant, so that a disaster in one area doesn’t completely kill your bottom line for the next couple quarters.

          I get that low wages, skilled labor, and governmental enticements play a large part in what gets built where. But Thailand doesn’t have a monopoly on any of those. Southeast Asia is full of countries like that, and both Latin America and Eastern Europe have those too.

            • JustAnEngineer
            • 8 years ago

            There are significant economies of scale associated with having a single large factory or single large warehouse rather than many small ones. Manufacturing, logistics and administration can be more efficient at the large scale facility.

            There’s usually got to be a calculation of the business interruption exposure risk, but in a competitive environment the lower costs for a large-scale plant are appealing.

    • StashTheVampede
    • 8 years ago

    For the same (or similar) prices, you can get SSD instead.

      • just brew it!
      • 8 years ago

      [quote<]For the same (or similar) prices, you can get SSD instead.[/quote<] ...with about 1/10th the capacity.

        • indeego
        • 8 years ago

        And as free space approaches 0% fragmentation dramatically increases and performance dramatically decreases. If you are using a HDD at 99% capacity you will see abyssmal performance (under NTFS) Under most SSD’s you won’t see nearly the same performance penalties, (if at all).

          • just brew it!
          • 8 years ago

          Sure… but if I need to store 500 GB of data, having a 120 GB SSD instead of a 1 TB HDD does me no good!

        • StashTheVampede
        • 8 years ago

        A lot of people would prefer to access their data in the fastest possible manner. Not everyone will fill a 1-3TB hard drive and prices are starting to creep closer to SSD levels. For the same dollar amount, I’d prefer to go SSD.

          • NeelyCam
          • 8 years ago

          I always prefer having both. SSD for OS/programs, HDD for data.

          • just brew it!
          • 8 years ago

          My point was that telling people to “just get a SSD instead” is a one-size-fits-all solution which may not be appropriate for everyone.

            • LoneWolf15
            • 8 years ago

            Total agreement. I’m only using the SSD/HDD combo on my notebook. For my desktop, an SSD isn’t large enough. I have a `Raptor for my boot drive.

          • UberGerbil
          • 8 years ago

          And a lot of people have many GB of video data that they almost never need to access any faster (or with lower latencies) than the rate required to send one stream to a screen (often across a network, which is going to limit it to gigE speeds at best anyway, or whatever their wireless can manage). I suppose some of those people have the thousands of dollars necessary to purchase that capacity in the form of SSDs, even if the bandwidth and latency benefits are entirely lost, but it’s still not a very cost-effective approach.

          I’ve been a advocate of SSDs for years, but — like almost everything — they aren’t a simplistic one-size-fits-all solution.

            • JustAnEngineer
            • 8 years ago

            My 5400-rpm 2 TB hard-drives are fast enough to record two HD programs while simultaneously playing back a previously-recorded program. These HD TV recordings are on the order of 4.2 GB per half-hour.

      • Krogoth
      • 8 years ago

      If you aren’t storing bulk data, SSDs would work.

      • ronch
      • 8 years ago

      I wonder when that statement will be commonplace concerning internal storage..

    • Kurotetsu
    • 8 years ago

    Wow, good thing I grabbed another 1TB Spinpoint F3 while I still could.

    • smilingcrow
    • 8 years ago

    “We’re looking at price increases in the 180-290% range”

    Not according to the graph or are those percentages related to other data?

      • Vasilyfav
      • 8 years ago

      Biggest increase I see is the EcoGreen ~200%, I don’t know where they got 290% from.

      • Dissonance
      • 8 years ago

      Forgot the -1 in my formula. Too many spreadsheets going at once. Fixed.

      • Dashak
      • 8 years ago

      Spinpoint F3 is 233% its 10/18 price.

    • glynor
    • 8 years ago

    I happened to need a new 3TB green drive recently for backup purposes. I’d bought one few months ago, but I always like to keep two active backup drives (one offsite), and I’d outgrown the 2TB drives I was using previously. But, since I didn’t have a burning need, I was initially waiting and hoping they’d come down even further from the $119 I paid Newegg for the WD 3TB Green drive.

    Then, I woke up one weekend and saw the news that Thailand was basically under water, or at least WD’s plant in Thailand, and that HDD prices were expected to be impacted.

    I immediately jumped over to Newegg and looked up the WD 3TB Green drive. It had jumped to around $170-ish. I searched all over and found a few lower prices, but nothing close to the $119 I’d paid just a little while earlier. [i<]Until[/i<] I found a 5400rpm Hitachi 3TB drive on B&H for $125 with free shipping. I don't think I've ever clicked buy that fast before. The WD 3TB Green drive is listed on Newegg for $279 right now, though if you're looking, [url=http://www.bhphotovideo.com/c/product/764167-REG/Hitachi_0S03228_3TB_5K3000_Deskstar_3_5.html<]B&H still has that Hitachi for $170 with free shipping[/url<]. Of course, mine came DOA (which seems to be somewhat common with that Hitachi drive, though if you get one that works, they're good drives). B&H was very good about the RMA process though. Even sent me a pre-paid UPS label without me even asking.

    • Bensam123
    • 8 years ago

    Are all hard drives really made in Thailand?

      • Peldor
      • 8 years ago

      No, but according to one article I read 70% of the motors for hard drives come out of one factory in Thailand. <grainofsalt>

      So you can have your TB disks from other manufacturers, but you have to crank them by hand.

        • BobbinThreadbare
        • 8 years ago

        70% of all HDs seems farfetched, I could easily see 70% of one company though.

          • just brew it!
          • 8 years ago

          He didn’t say 70% of all HDs, he said 70% of the [u<]motors[/u<] used in HDs. That's a lot more plausible.

            • Peldor
            • 8 years ago

            The company is Nidec that supposedly has 70% of the HD motor business. I said one factory, but they have three, unfortunately all three were stopped at least a one point due to the floods.

            News updates below have one motor plant resuming Oct 25.
            [url<]http://www.nidec.co.jp/english/news/news.html[/url<]

            • just brew it!
            • 8 years ago

            Flipping through those press releases, it appears that the factory in question was out of commission for 2 weeks, and had a production capacity of 20 million motors/month. If they were operating at close to capacity prior to the flooding, that would mean that about 10 million motors didn’t get produced. That’s a lot of hard drive motors!

            They also don’t say whether they’re back to operating at full capacity, just that “operations resumed”.

            [b<]Edit[/b<]: Ahh, the joys of Engrish... "No damages to the Company’s employees have been reported so far."

            • crabjokeman
            • 8 years ago

            That’s pretty tame for an example of “Engrish.” Sure, it’s in a passive voice, but it’s coherent and it’s not obvious that a non-native English speaker wrote it.

            This is one of my favorite encounters with Engrish – [url<]http://pickersparadise.org/mow/v14/showpix.html?id=IMG_1188.jpg[/url<] "you may cause the chair broken" - Now THAT's Engrish gold.

            • Palek
            • 8 years ago

            People don’t get damaged, they get injured.

        • Bensam123
        • 8 years ago

        lol…

        That’s just about as bad… I spose…

      • pedro
      • 8 years ago

      It’s a combination of HDD plants (Seagate & WD) but also component makers. My wife worked for Shin-Etsu for six years. They’re located right in the heart of the flood. They make magnets, amongst other things, that go into the HDDs. That whole region just above Bangkok is full of industrial parks that make bits for HDDs.

    • just brew it!
    • 8 years ago

    Yesterday I bought the last 2 Seagate 1 TB 7200 RPM drives the local Best Buy had in stock. I only paid $65 each for them. It would appear that B&M retailers like Best Buy didn’t react as quickly (if at all) to the constrained supply.

    I figure those two drives ought to take care of my storage needs until sanity returns to the hard drive market…

      • indeego
      • 8 years ago

      I did this a decade ago when memory prices had skyrocketed. A Fred Meyers (Now Kroger owned) had memory for easily 50% of the prices online. I bought ALL THE THINGS, resold on ebay@10% less than online retailers, made hundreds.

      • BerserkBen
      • 8 years ago

      I bought the last 3 Seagate 2tb 5900rpm drives for $75 each from Best Buy Wednesday. Could have bought more from a different store but didn’t think it would be worth the drive, now I’m thinking I should have for a quick little profit. At least I’m all set on storage for myself.

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