The floods in Thailand continue to wreak havoc in the component supply chain and now the CEO of Seagate is predicting there will be a shortage right up to the end of 2012.
According to Bloomberg, which interviewed CEO Stephen Luczo, predictions that everything will be back to normal by summer next year are highly unlikely. Although Seagate factories are not submerged by floods, many of its 130 component suppliers are, and that is leading to a shortfall in production.
And as sure as love and marriage go together like a horse and a duck, a shortage means prices will rise. It’s not just the price of hard drives that are rising – Seagate’s share price is rising too.
Bloomberg says drive prices have already risen by 20 percent and Western Digital and Toshiba are in trouble too. It puts Luczo and his company in a good position because he can place his customers on allocation and put the prices up.
This is the bitter bit, because PC vendors have driven down the price of hard drives to yield much smaller margins than they used to – but now the PC vendors have to pay the piper that’s playing the component tune. You can find more at Bloomberg, here.