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Shift to SSDs fueled by Thai floods

Posted: 14 Nov 2011 ?? ?Print Version ?Bookmark and Share

Keywords:HDD supply? SSD market? Thailand flood?

Due to the devastating floods in Thailand that have slumped HDD supply globally, the Taiwan hardware and component channel is expected to suffer. However, some sources predict that this could reveal a bright spot for SSDs.

A marketing manager at motherboard manufacturer Gigabyte Technology Co. told EE Times that while it was an exaggeration to say shipments might drop 25 percent in Q4, a 10-15 percent decrease was likely. "We haven't been affected yet, but the market is in panic mode because computer makers don't know when they will be able to order HDDs from Western Digital Corp. (WD) and Seagate Technology again."

WD's Thailand factory is said to be flooded with up to two meters of water. Seagate's facility remains above water but is running perilously low on components such as motors and heads. In the Taiwan channel, distributors have begun to hoard the drives, he added, hiking prices by as much as 200 or 300 percent, even though the HDD manufacturers themselves had only hiked their prices up by about 50 percent.

"They don't know how many they will be able to buy and when they will be able to order again," he stated, noting that buyers for the big multinationals such as Dell Inc., Hewlett Packard Co. and Acer Inc. were scouring the Chinese market and buying up as many HDDs as possible to stock up in case of acute shortages. "In some places they are starting to run out already. So this will affect everyone."

It has been reported that even Asustek Computer expects to see shipments decrease from 6.3 million in Q3 to six million in the fourth, though analysts believe that could be an underestimation and the figure could be closer to 5.4-5.7 million. Both MSI and ASRock Inc. also expect to see their shipments down by 10 percent due to the shortages.

The major hit has been to 2.5in drives, rather than the larger 3.5in drives more commonly produced in Malaysia or mainland China facilities. The smaller drives are typically targeted at the notebook market that has incredibly tight margins in order to keep prices affordable for consumers.

"If notebooks become significantly more expensive, people might even start considering the desktop as a cheaper alternative again," said the Gigabyte spokesman. "We'll know in four to six weeks what the supply will look like in 1Q12 and then things should ease up and prices will normalize," he said, adding that the flooding could end up having a positive effect on the SSD market.


Thailand floods will speed up transition to SSDs.

"Most people have predicted that SSDs will only become a standard option in about two years' time," the Gigabyte spokesman continued, but with the continuing slump in DRAM pricespredicted to drop a further 20 percent in the coming monthsand the HDD shortages and price hikes, that time frame may well tighten.

SSDs are still very expensive, with half a terabyte costing about $1000. Indeed for every 64GB SSD, one could buy a three terabyte HDD, but that's without factoring in the potential effects of the supply shortages and cost decreases in SSDs based on depreciating DRAM.

"These floods and the combination of other factors will speed up the transition, especially for the notebook makers" Gigabyte's spokesman added.

- Sylvie Barak
??EE Times

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