Thailand was hit by severe flooding this year, starting in July and still disrupting some regions now. Thailand also happens to be the world’s second largest producer of hard disk drives. Many of the factories producing the hard drives were flooded stopping production.
It has taken a while for the shockwaves to filter through and it is likely that the first quarter of 2012 is when there will be a significant shortage of hard drives.
Intel this week released a statement that it expects a fourth-quarter revenue shortfall of roughly $1 billion. As Intel’s customers realise they will not be able to get enough hard drives for their computers, they are reducing orders for the Intel chips.
The PC market has been hardest hit “Server has been relatively strong but we’re seeing a pretty significant reduction in backlog in the PC-related segment of our business so that seems to be where it’s really hitting us,” said Stacy J. Smith, Intel’s chief financial officer.
Supply is expected to catch up with demand sometime during the first quarter of 2012.
In the meantime the cost of hard drives is increasing. For lower end drives, which have been in highest demand, prices have almost doubled.
At UKFast we have found that many suppliers are limiting the number of hard drives per order. Fortunately, due to our long standing relationships with suppliers we are able to get higher maximum order volumes.
We have also seen many big suppliers stop providing hard drives alone as they stockpile to ensure they can continue building their own PC’s and servers. This, combined with Christmas when demand naturally increases, has made it a tough market for many smaller businesses looking to buy hard drives.
The Thailand flooding is a stark reminder that technology is not immune to the effects of the natural world.
Have you been impacted by the hard drive shortage?