Hard drive quotes in Taiwan at the end of June dropped 10-20% compared to levels seen at the beginning of the second quarter, according to sources from hard drive players.

Supply had been tight since the second quarter of 2009 causing quotes to remain at a high level until the second quarter of 2010, when Europe's bond crisis occurred and started affecting PC demand. As PC brands started downwardly adjusting their shipment forecast for the third quarter, it relatively helped relieve the shortage of hard drives and even turned the market status to over-supply, as a result, the hard drive makers started reducing their quote.

The sources noted that quotes for capacities over 500GB at the end of June had an average drop of about 20% compared to the beginning of the second quarter, while 250GB and 320GB capacities had an average drop of about 10%.

For the third quarter, the sources expect hard drive shipments will remain at levels seen in the second quarter, though previous years had generally seen strong growth in this time frame.

Since the total number of hard drive suppliers worldwide has been reduced to only 4-5 players, the market is unlikely to see a price war this year, helping the industry to become healthier, the sources noted.