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Hard Drive Shortage

Quick Question. When does 30% mean 100%? When there's a land-grab.

The flooding in Thailand over the past month has flooded a large percentage of the world's production of hard drives. There are pictures out on the Internet of whole factories under water.

All of Western Digital's Thai plants are shut and Seagate's are running slowly. But even manufacturers outside Thailand are saying they may be facing shortages of some parts that go inside hard drives. Thailand is the world's second largest manufacturer of hard disks. Experts expect the supply of hard drives worldwide will shrink by about 30%. That doesn't sound too bad. But try to buy a hard drive. Some stores still have them, but distributors are pretty much out of all models and here at VCC we can't get any high-end drives. Our distributors are completely out. We have found a couple of vendors on eBay and Amazon that we have never done business with before. But their prices are quite high and they will only sell one drive per customer. That's nice until you try to build a server with RAID, which requires multiple identical drives. Oops. What's going on here? How is it that a 30% shortage completely dries up supply? Because as soon as the major vendors heard about the problems, they bought up all the drives they could find. Then speculators started the second round of feeding-frenzy. So, an event that should have caused minor disruptions has caused the world's supply of hard drives to virtually disappear. The only way to purchase hard drives now is from the speculators at double the price of two weeks ago (I'm writing this on October 26). If the weather forecasters are correct and the flooding continues for another 6 weeks, prices are certain to go even higher.

The funny thing about this is that because solid state drives (SSDs) aren't manufactured in any quantity in Thailand, they are still in plentiful supply. Two weeks ago, you'd have to pay double or triple the price for a smaller SSD drive. Now, they are about the same price. Soon, they may be more expensive. Rick has been telling everyone he can get to listen to him that all anyone needs in a computer is an SSD and a comfortable chair. While the price of SSD's hasn't come down, the relative price certainly has. If you suddenly find that you need a new hard drive, treating yourself to a super-fast SSD just became a no-brainer.

Posted October 28, 2011

Quick Update

We can now get hard drives. Distributors do show limited numbers of hard drives in inventory, but prices are awful. Most drives now cost 2 or 3 times as much as they did in September.

Most computer manufacturers are expecting high prices on hard drives to impact sales of new computers into March or April. The floods have subsided, the factories are ramping up, but the supply is still reduced.

Updated January 9, 2012