Hard Drive Crisis, Episode Two

Following the floods in Thailand in 2011, global hard drive production was severely disrupted due to the presence of numerous hard drive manufacturer factories - such as Seagate or Western Digital - in the affected areas.

After a few months, the situation seems to be picking up again, even if in the first quarter of 2012 hard drive production still has not returned to its previous levels. Indeed, this production is now at 80% of the level of a year ago. In the first quarter of 2012, 140 to 145 million hard drives were produced, compared to 175 million in the first quarter of 2011. However, this result is almost 20 million units higher than the results of the previous quarter.

The same applies to hard drive motor manufacturers, such as the Japanese Nidec Corp and Minebea.

The general consequences of this production crisis are reflected in a decrease in the number of years of hard drive warranties and an increase in sales of SSD hard drives, whose manufacturers were not affected by the floods. The financial consequences were also severe, as Western Digital reduced its productivity by nearly 43%; its turnover thus suffered a loss of 20%, for a net profit of 145 million in 2011.

However, the recovery of this productivity should have an effect on the price of hard drives, which should continue to fall in the coming months.