HP Joins the Club for Hard Drive price increases

Chris Mellor over at El Reg has the specifics. Consider this no big surprise as all the big vendors will follow suit, and the trickle down will hit the storage industry as a whole. The big mystery factor will be at what point will the prices reduce, if ever. Definitely  something to keep an eye on 6 months from now as drive production ramps back up and stabilizes.

According to IDC, Thailand accounted for 40-45% of worldwide HDD production during the first half of 2011. Many factories have been flooded, and in others production has been impacted due to power outages and work stoppages. Approximately half of Thailand’s HDD production capacity has been impacted by the flooding.

The magnitude and duration of the disruption will not be clear until the floodwaters subside, but the industry is already experiencing severe shortages of certain HDD components. In particular, large-capacity SAS and SATA drives are in short supply. HP is working closely with our suppliers to maximize our access to these HDDs. We have a significant advantage in this environment due to our world-class supply chain; however, worldwide output will clearly be much lower than worldwide demand.

This reduction in available supply is causing immediate and significant increases in the prices that HP and all other vendors pay for hard disk drives. Component prices have already increased approximately 20%. In this context HP will be forced to increase the prices that we charge for certain disk drives.

We are hopeful that this crisis will come to an end soon. We are doing everything in our power to gain access to sufficient HDD supply so that we can help you fulfill your requirements. We are also prepared to engage with you to explore alternate solutions where appropriate.

Perhaps putting nearly 50% of the worlds hard drive manufacturing into a flood/tsunami prone lowland country wasn’t the smartest move.

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