Hard disk drive shortages are expected to peak in the first quarter of 2012, and the global supply chain will resume normal production the following quarter at the earliest, according to Taiwan-based component makers.
The makers noted that to recover their hard drive manufacturing plants will not require too much time, but since their upstream hard drive component suppliers such as Japan-based Nidec, which supplies 80% of global hard drive motors and has 30% of its capacity located in Thailand, and Taiwan-based Min Aik Technology, have all been seriously impacted by the floods, they will still be unable to resume production.
Western Digital, which experienced the most serious impact from the floods, pointed out that its plants in China, the Philippines, Malaysia and Singapore, have all implemented a shift rotation system to help cover the supply gap. The company's hard drive shipments in the third quarter were about 58 million units, and after losing its plants in Thailand, the company currently has about 40% of its original capacity, equivalent to quarterly shipments of 24 million units, and this number only applies on condition that the company still has sufficient component inventory.
Since the recovery in Thailand is already lagging behind, if the supply gap of key components is unable to be satisfied, both component and hard drive inventories are expected to be depleted in the first quarter of 2012.
The situation has also caused channel retailers to raise their hard drive prices and pile up inventory. Currently, a 2.5-inch 500GB hard drive's price has already risen close to 60%, up from NT$1,300 originally to NT$2,100. Commenting on the situation, the makers pointed out that the adjustments ought to be made because of the expectation of potential shortages, although hard drive makers did increased their prices in October, the range was only about 15-20%.
As for piling up inventory, Western Digital pointed out that it originally supplied 45% of its capacity to OEM players with the remaining 55% supplied to retail channels. After the disaster, the company will evaluate its current capacity and rearrange its distribution.
As for whether Western Digital will consider readjusting its production proportion to separate the risk, the company pointed out that its focus currently should be on recovering its capacity and it will make evaluations about adjustments at a later time.
Source:digitimes