Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > Memory/Storage

Full recovery of HDD prices expected by 2014

Posted: 14 Jun 2012 ?? ?Print Version ?Bookmark and Share

Keywords:HDD price? HDD supply chain? Thailand floods?

According to an IHS Inc. market report, average selling prices (ASP) of hard disk drive prices (HDD) are not expected to decline until 2014 despite rapidly recovering from the catastrophic October floods in Thailand. In the wake of the floods, the ASP for the entire HDD market soared to $66 in the fourth quarter of 2011, up 28 percent from $51 in the third quarter. The ASP held steady at $66 in the first quarter, and is expected to decline marginally to $65 in the second quarter.

Meanwhile, after flooding caused a 29 percent plunge in shipments in the fourth quarter, HDD production is on the rise and is projected to recover by the third quarter. Shipments rose by 18 percent to 145 million in the first quarter and by 10 percent to 159 million in the second quarter. In the third quarter, shipments are expected to rise by another 10 percent to 176 million. This will mark the first time in 2012 that shipments will exceed their 2011 quarterly levels, up from 173 million in the third quarter of 2011. Despite exceeding pre-flood shipment levels in the third quarter, pricing is expected to remain inflated.

Due to the concerns over HDD availability, multiple PC original equipment manufacturers (OEMs) have signed long-term agreements (LTAs) with HDD makers during the second quarter. These LTAs provide shipment guarantees, but also caused locked in prices that were approximately 20 percent higher than pre-flood levels. Even if all the OEMs stop entering into LTAs by the end of 2012, it would take about four quarters with a 6 percent sequential decline in the HDD ASP to reach the pre-flood pricing level. However, given that there have been no consecutive 6 percent sequential quarterly declines during the past three years, this is unlikely to happen now and HDD pricing will decline accordingly.

Beyond the supply-side factors, demand-related issues will also contribute to inflated HDD pricing throughout 2012 and 2013. From local drives to cloud storage, the requirement for large quantities of HDDs continues to increase. Meanwhile, PC sales are also projected to climb in 2012. Growth will be driven by the rising adoption of Intel Corp.'s Ivy Bridge microprocessor, the surging sales of ultrabooks in the second half of the year and the proliferation of Microsoft Corp.'s new Windows 8 operating system.

Article Comments - Full recovery of HDD prices expected...
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top