Seagate CEO: Hard Drive Production Won’t Return to Pre-Flood Levels for a Year

From: Hardware Canucks 11-21-2011

PERSONAL NOTE: For those who have NOT recently checked out hard drive prices, you WILL be shocked!

The two Samsung HD103SJ 1TB drives that I own, which I bought for $70 from Newegg about a year ago are now $159.00 plus $8.99 shipping!! More than double what I paid.

Now the article:

In late October, Hardware Canucks reported that retailers were raising their prices on Hard Drives because flooding in Thailand had shutdown a number of key production facilities. Now, Seagate’s CEO is forecasting that it could take up to a year for the industry to return to pre-flood production levels.

Two of Seagate’s main competitors – Western Digital and Toshiba – have production facilities in the industrial heartland immediately north of Bangkok, which also happens to be a floodplain. This area was hit the hardest, wiping out employee’s homes and destroying sensitive equipment in the factories.

Seagate, however, has its operations in Teparuk, an area of Thailand that has been uncharacteristically dry. As a result Seagate has the majority of its capacity intact, though has shortages from some suppliers who have had their factories flooded.
“It’s going to be very interesting to see who gets drives and who doesn’t,” said Seagate CEO Stephen J. Luczo to Bloomberg. Luczo claims he has been talking with customers who are eager to lock up some of Seagate’s excess capacity, even at higher prices.

Luczo told Bloomberg that he is also considering requiring all Seagate suppliers to move their operations outside of the flood plain, to avoid a repeat of this incident. Seagate is reportedly fronting loans to some suppliers as an incentive to move their operations, and get them back online.

“People are going to appreciate the complexity of this business,” Luczo remarked.

Supply and demand at it's finest.....bollocks!!! Now, not only am I being priced gouged at the gas pumps, the grocery store, any and all retail stores...my 3 favorites..Walmart, BestBuy and Dicks. Now I'm going to get the shaft on hard drives pricing as well.....will the madness of it all ever end!!!!!

I'm very happy to see that comment and think it should be a per-requesite for all big manufacturing companies. Building in a natural disaster area is only looking for troubles.

The thing that shocked me the most was an 80GB drive that was made several years ago nearly tripled in price. Honestly I wouldn't have paid the price for an 80GB before the disaster. I know I'm not going to pay the price for one now. I don't mind the price inflation for the high capacity drives so much. Even with the inflation of the high capacity drives, they would have trouble selling me an 80GB drive at the price before the inflation.

I feel that some retailers and suppliers, i.e. hardware manufacturers are taking advantage of the situation and needlessly inflating HDD prices. For example, the one Cliff stated about an older 80GB HDD going for three times the price of just a few months ago.

These are totally unnecessary increases IMHO for older drives, but IF the market will bear it then why not? Probably the pricing is being set by an individual named: Ben Dover!

Getting exactly the same here (obviously). The Samsung SpinPoint F3 HD502HJ I bought and paid £32.72 in June this year, is now priced at £97.79.

Methinks my plans to get another (or larger) are definitely on hold!