The effects of the Thai floods are beginning to have significant effect on product prices in the UK, with substantial hard drive price increases, and PC increases just around the corner.
Thailand is the world’s centre for hard disk and hard disk component manufacturing, and major firms such as Western Digital have been ravaged by the recent floods.
TechEye spoke to UK based distributors and found that the knock on effects of vanishing inventories are being passed on to retailers and consumers, with much worse to come.
According to Avnet, supply of hard drives is looking “very scarce” over the next quarter or two. This has meant that in the UK prices have “gone up a lot already”, and on Monday there are expected to be further price increases. Rough estimate by sales staff have put increases of £10 to £15 added on per hard drive, on top of already rocketing prices. Further price hikes on top of this cannot be ruled out either by Avnet.
TechEye also found more details from Ingram Micro which has also seen prices shoot through the roof. We were told that hard disks going for £30 previously are now being flogged for between £70 -£80 as prices increase “considerably” due to very limited stock.
And due to the fact that flooding is still going it is expected by Ingram Micro that prices are only going to get worse over the next few quarters.
In terms of overall PC prices Ingram Micro told us that there has not been any change, but that there is a good chance that these too will be affected come the first quarter of 2012 when supply “starts drying up”.
Interestingly, despite all the carnage occurring to the market, there is one section which could actually benefit from the mass disruption. With Intel’s much vaunted ultrabooks the majority of manufacturers are using solid state drives, apart from Acer, so the high prices may not be such an issue in a month’s time. Meanwhile, notebook vendors see prices pushed up for their products.
With many factories still actually underwater due to continued flooding, production has been substantially hit and product prices are beginning to soar as inventory levels are depleted.
The word from Eastern sources is worrying and there is little optimism for a swift return to normality by UK distributors.
According to DigiTimes brand vendors have looked to ‘gray’ markets, with prices doubling what are usually paid as vendors are increasingly desperate to fill inventories.
This is also leading to situations where PC makers are having to contemplate stopping production this month as hard drive supplies dwindle from the 170 million units seen in previous years to 100-110 million units in 2011.
Production is being attempted to be moved by some hard disk manufacturers to different countries but it could be a long time before normality prevails. Part of this is due to flooding meaning that any submerged equipment will need to be replaced. In an earthquake however it is said that much of the manufacturing equipment that survives will just need restarting.
For one firm, Nidec, it is said that it could take two years to fully recover, though this is not likely to be the case for most manufacturers.