Thai flood HDD undersupply leads to oversupply

The drenched shores of Thailand have knocked the supply chain sideways since they began, and despite the best efforts of HDD manufacturers to run quick clean-up operations the forecasts for 2012 prove, yet again, the effect unexpected natural disasters can have worldwide.

As with the tragedy in Japan at the beginning of the year, which disrupted the supply chain for months afterwards and had an effect on most company’s forecasts, the Thai floods are expected to have caused a 4 million unit shortfall in PC shipments for the beginning of 2012.

All of 2012’s forecast has been dented and PC shipments will only expand by 6.8 percent compared to 9.5 percent, according to IHS figures.

PC makers are claiming that there are enough HDDs to go around in the fourth quarter of this year. But that doesn’t reassure for 2012 in general, as, according to senior principal analyst at IHS Matthew Wilkins, “those stockpiles wil run out in the first quarter of 2012.”

It’s not exactly good news for an industry which has been entrenched in doom and gloom. PC sales have been hard hit this year, according to data from Gartner. Netbooks, too, are tipped to go the way of the dodo. The great hope for manufacturers is in ’emerging’ markets like India, China and Brazil where demand still exists

Companies like Seagate and Western Digital had been rushing to fix their operations in Thailand, while other manufacturers ramped up production outside of the region to compensate. IHS says the hurry to get the show back on the road could, ironically, damage the industry further.

As manufacturers seek to plug the supply gap between the beginning and end of 2012, when the year’s through the world is likely to have too many HDDs on its plate. There is a real danger of oversupply, warns IHS, which isn’t good for an industry either.