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HDD prices will return to pre-flood levels in 2014: IHS

Posted: 08 Jun 2012     Print Version  Bookmark and Share

Keywords:hard disc drives  average selling prices  pre-flood levels  research 

Although the production of hard disc drives is rapidly recovering, the average selling prices of HDD will not reach pre-flood levels until 2014, stated the market research firm IHS.

In the wake of the floods in Thailand, the average cost for the entire HDD market soared to Rs.3,455.50 ($66 )in the fourth quarter of 2011, up 28 per cent from Rs.2,670.16 ($51 )in the third quarter. However, with the production getting back on track the price is expected to decline marginally to Rs.3,403.14 ($65) in the second quarter.

"Meanwhile, after flooding caused a 29 per cent plunge in shipments in the fourth quarter, HDD production is rising and will recover completely by the third quarter."

Shipments rose by 18 per cent to 14.50 crore in the first quarter and by 10 per cent to 15.90 crore in the second quarter. In the third quarter, shipments are expected to rise by another 10 per cent to 17.60 crore. "This will mark the first time in 2012 that shipments will exceed their 2011 quarterly levels, up from 17.30 crore in the third quarter of 2011."

IHS

Despite exceeding pre-flood shipment levels in the third quarter, pricing is expected to remain inflated.

"HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep average selling prices steady," said Fang Zhang, analyst, storage systems, IHS. "With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 per cent of HDD market share in the first quarter 2012. This was up from 62 per cent in the third quarter of 2011, before the mergers. The concentration of market share has resulted in an oligarchy where the top players can control pricing and are able to keep ASPs at a relatively high level."

Beyond the supply-side factors, demand-related issues also will contribute to inflated HDD pricing throughout 2012 and 2013.

For more statistics and forecasts, click here.





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