Over the past couple of weeks or so, gadget shoppers worldwide have watched as the impact of the WD HDD factory shutdowns due to the massive Thailand floods have caused hard drive prices to soar upward. In many cases, HDD prices have doubled or even tripled within just a month. Here in Singapore, for example, for the popular portable WD 1TB USB HDD, it used to cost $129 at the prior IT fair, after which it retailed for $139. After the floods hit, the price climbed to $159, $179, and now at some stores it is going for a breathtaking $299. We'll just have to see how much these go for at the next upcoming IT fair, SITEX 2011.
Now, how did these price increases come about? Some of these price increases could be attributed to panic buying as individuals and companies, large and small, went into stocking-up overdrive mode. According to IDC, Thailand accounted for up to 45% of worldwide hard drive production in the first half of the year, and that nearly half of that capacity was affected by the flooding as of early November. So that would make say, 20-25% of worldwide hard drive production being affected. Those of us who also happen to be watchers of the commodities markets would recognize this as the classic supply-driven scenario, where pricing happens at the margins, and even small supply disruptions could lead to large increases in price.
What we do know currently : based on this article, WD 2.5" HDD production has been hugely impacted. These are the units that go into notebooks and portable USB hard drives, so it shouldn't be too surprising that this type of HDD's have gone up in price. On the other hand, apparently Seagate is relatively unscathed, though it is said to be running low on other components it needs that come from companies that were affected by the supply chain disruptions. In other news reports, Asus is running out of hard drives, HP is being approached by the likes of Facebook and Google because they had moved fast to lock in supplies, and Bloomberg had reported that Seagate has even been offered some $250 million upfront to lock in hard drive capacity. Might that have been companies like HP, perhaps?
On a personal level, what you can do, besides holding off on buying new hard drives, particularly those 2.5" HDD's that are getting scarce? You could consider switching to SSD for notebook or desktop boot drives. But you'll have to bear in mind that gigabyte for gigabyte, these could be up to an order of magnitude more expensive than conventional hard drives, even with the recent run-up in HDD prices.
Case in point : for that WD 1TB USB HDD mentioned above? At $129, it used to be 12.9 cents per gigabyte, and when it ran up to $299 the per-gigabyte cost went up to 29.9 cents. Fine, but as for let's say the OCZ Vertex 2 120GB that I have in one my of laptops, it currently costs $259, which works out to $2.16 per gigabyte, which was 16 times more expensive then, and that ratio has reduced to 7 times more expensive now. But if you consider that you can get up to 10 times the performance (in terms of IOPS, or I/O operations per second), the value proposition is getting slightly better now.
Or, you could also join the tablet revolution if you have not done so already. If anything else, this situation might even have the potential to speed up the process of conversion from netbooks and laptops to tablets, whose capabilities, with dual-core processors and increasing memory size are now encroaching upon the territory of entry-level notebooks. Looking at it this way, now is as good a time as any to start moving to tablet computing.