Scrimping hard disk manufacturers not helping supply shortage

Scrimping scrooge-like manufacturers in the hard disk industry are to blame for a shortage in supply, according to distributors.  

Our sources in the distribution channels say that industry bigwigs like Western Digital have been scrimping on supply in a bid to cut on overheads and keep prices low.

However, they have kick-started a domino effect, as smaller companies are manufacturing even less which is tightening distribution.

“Now, because of the earthquake, this has all gone wrong and left our customers behind as we can’t supply their orders”, a distributor familiar with the matter told TechEye.

The comments follow a report from DigiTimes, which cited the Japanese earthquake as having a huge supply chain impact on the hard disk industry.

It said that the effect will continue into May, with the likes of the enormous Western Digital and Hitachi Global Storage Technologies (HGST) already seeing tight supply.

This is despite the likes of Texas Instruments and Renesas Electronics both working hard to get their supply back on track.

Distributors hold no sympathy. One disgruntled distie told us: “The blame as I see it lies in the hands of bigger manufacturers such as Western Digital who have set the distribution and manufacturing tone.

“Tight supply means cheaper overheads, which means cheaper prices. To keep up with them smaller cos are manufacturing even less once again tightening distribution. And now, because of the earthquake this has all gone wrong and left our customers behind as we can’t supply their orders.

“We’ve struggled to supply our clients with a sufficient amount of hard disk demand and as a result have seen many cancel orders. This has mainly been since the Japanese earthquake, but we also had a smaller problem before, which we put down to holidays in the country and a lack of manufacturing.

“It’s not easy to say who has been hit most. The bigger ones – like Western Digital – have suffered but that’s because they were manufacturing to order rather than to keep up with demand or supply.

“No-one thought about what would happen in a crisis. We don’t expect to be able to distribute fully to our clients until at least the end of the year. At the moment it seems as though we’re scraping to get orders out.”  

Other have been slightly less scathing, but maintain a similar message: “While we can’t list the companies struggling with this, it’s fair to say that the earthquake has affected out distribution and of course supplies.

“This is mainly down to a short supply before the quake, which means that we haven’t had any backlog.”

HDD prices started to rise slightly in April with some models seeing an increase of 10-15 percent.

Whether that helps in the short term remains to be seen.