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WD: Hard drive prices are 47 percent higher since Thai floods

Western Digital has reported their quarterly earnings today, and there are finally some hard numbers to show off the effect of the floods in Thailand.

Year-over-year, the company saw a huge drop in drives shipped, down to 28.5 million down from 52.2 million. The company took a $200 million loss in expenses related to the floods, and a $500 million drop in total revenue.



On the other hand, prices jumped 47 percent to $69 per unit over last year, thanks in part to a large gross margin increase. Margins are now at a hefty 32.5 percent compared to 19.2 percent last year.

Thai factories are expected to be up and running to pre-flood capacities by September and a full pipeline ready by March 2013.

Other hard drive makers have made similar statements so do not expect hard drive prices to return to their all-time lows (summer 2011) anytime soon.

Written by: Andre Yoskowitz @ 24 Jan 2012 23:38

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• 32 comments

• Blessedon

  Good; This is how supply-and-demand should work.
  I may need a HD right now, but I can wait. In the long run, we will all benefit from lower prices due to competition.
  Now, many will see this as "evil corporate...blah, blah". They can not see beyond tomorrow.

  25.1.2012 07:08 #1

• Mysttic

  I can't really call this corporate greed myself, if they had stayed the same prices as 2011, they never would have met supply and demand which is what dictates the market. This is how all PC hardware worked since the dawn of it, so this should really be of no surprise to anyone.
  
  Thankfully to myself, I glad I don't need new HDDs anytime soon; it sucks for other people, but then with the way tablets and smart phones are booming, I don't think it'll matter to most people anyhow.

  25.1.2012 08:03 #2

• LordRuss

  It's a shame that this subject had to come back up again, but then again, I haven't bought a new HDD in quite some time due to price increase as well.
  
  I feel for the folks in those flood areas, but have no love lost for corporations.
  
  When I commented on the original story, I refused to believe that a company (at least one of this size, of course) would 'put all it eggs in one basket'. Like the BP spill, to not use common sense & have a safety net in place or have redundancy seemed fool hardy. Yet, here we are.
  
  Now that the president spoke last night about HUGE incentives to corporations invite them back into the US (like it used to be) I'm wondering what kind of debacle that's going to cause in the short run as well.
  
  Part of me is thinking back to some of the baby-boomers mentality toward foreign technology & American pride in manufacturing. The other is thinking back to a power change in office again, just when things JUST start to work & things go right back to total shite & the US starts sharing that fecal sandwich with everybody again.
  
  I would really like to know why any of this has stopped research & development on higher capacity HDDs at all anyway. Haven't heard anything from fan/consumer based PC publications in a while about the subject... So? Manufacturing is the least of the problems at the moment anyway.
  

  http://onlyinrussellsworld.blogspot.com

  25.1.2012 11:41 #3

• hearme0

  I agree with LordRuss.
  
  But this is what companies like WD get for outsourcing. You outsourced to a country/region know for natural disasters, flooding, famine, poverty and now you're reaping what you sow.
  
  Bring that shit back to the United States where it belongs and put OUR people back to work and then a couple things will follow: likely not to get flooded, more integral workers and better quality...........Yes........a little more expensive but whatever! Tax incentives for doing this I'm sure, better rep, closer to home therefore easier to monitor.

  25.1.2012 13:25 #4

• ddp

  hearme0, the us also gets natural disasters like flooding, earthquakes & fires.
  

  25.1.2012 13:56 #5

• LordRuss

  Originally posted by ddp: hearme0, the us also gets natural disasters like flooding, earthquakes & fires. Now, now... We don't have to build everything in every river basin and tornado alley we can find either. Let's at least show cooler heads here and let our group tout & picket for common sense before they pack their suit cases & board their planes back to the red, white & blue balled.
  

  http://onlyinrussellsworld.blogspot.com

  25.1.2012 14:23 #6

• ddp

  just stating a known fact.
  

  25.1.2012 14:25 #7

• LordRuss

  Originally posted by ddp: just stating a known fact. Cause everyone loves a disaster...
  

  http://onlyinrussellsworld.blogspot.com

  25.1.2012 14:47 #8

• pounder

  I've Been Noticing since Boxing Day the solid increase, WD, & Seagate, But I won't touch aSeagate ever. So Glad I Picked up a WDC
  2.0 TB after Labor Day,for a 100.00 CDN.at Best buy.
  
  
  pounder!

  25.1.2012 15:08 #9

• DVDBack23

  Originally posted by hearme0: .Yes........a little more expensive but whatever! Tax incentives for doing this I'm sure, better rep, closer to home therefore easier to monitor. The "little" in your statement is not accurate. An American worker would cost more per hour than a Thai worker would likely cost for 2 days. NO tax or reputation incentive can change that.
  
  
  

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  25.1.2012 15:33 #10

• ChiknLitl

  Originally posted by LordRuss: ...I would really like to know why any of this has stopped research & development on higher capacity HDDs at all anyway. Haven't heard anything from fan/consumer based PC publications in a while about the subject... So? Manufacturing is the least of the problems at the moment anyway. New 4TB drives are starting to show up.
  
  http://www.newegg.com/Product/Product.aspx?Item=N82E16822145563
  
  5TB drives are on their way. Hitachi and Seagate are using 1tb platters now

  25.1.2012 15:33 #11

• LordRuss

  Originally posted by ChiknLitl: New 4TB drives are starting to show up.
  
  http://www.newegg.com/Product/Product.aspx?Item=N82E16822145563
  
  5TB drives are on their way. Hitachi and Seagate are using 1tb platters now Well shut my mouth! I mean they're in the stores, but I certainly haven't seen them on the tech circuit. I guess the SSDs are getting all the attention at the moment.
  
  Sadly, I can't really afford one of those puppies right now either, which is just as depressing too.
  
  Originally posted by DVDBack23: Originally posted by hearme0: .Yes........a little more expensive but whatever! Tax incentives for doing this I'm sure, better rep, closer to home therefore easier to monitor. The "little" in your statement is not accurate. An American worker would cost more per hour than a Thai worker would likely cost for 2 days. NO tax or reputation incentive can change that.
  
  Other than to say "automation", knocks a bunch of the physical, repetitive labor equation out the door. Logistics is still going to be within the borders no matter what & seeing as how the gov wants to play 'ping pong' with the nuts of our postal service, there may be something on the horizon there as well.
  
  Just as a closer, seeing as unemployment insurance has all but run out for everyone, virtually EVERY state has turned into a 'right to work state' (making unions useless), I would say 'any job' is job enough at the moment.
  
  So I'm not calling the debate wrong/right. I'm calling it about it about 80% plausible right about now.
  

  http://onlyinrussellsworld.blogspot.com

  25.1.2012 15:50 #12

• djgizmo

  This is a good thing as it'll provide SSD incentives to grab market share... and when they SSD providers have a decent amount of market share, regular HDs will go back on sale.

  25.1.2012 17:30 #13

• ivymike

  When they said that the prices of SSD's would become competitive with the prices of HDD's, I was hoping that the price of SSD's would DROP.....NOT the exact opposite!!!

  25.1.2012 18:57 #14

• Blessedon

  Originally posted by ivymike: When they said that the prices of SSD's would become competitive with the prices of HDD's, I was hoping that the price of SSD's would DROP.....NOT the exact opposite!!!
  Right! djgizmo's statement inadvertently notes the natural bleed that will occur in a market when there is a disruption of supply for a lower priced item; the loss of HDD supply completely eliminates the downward trend of SSD prices....
  until the end of the year anyway :)
  But, that's cool. We are all better off this way in the long run.

  25.1.2012 20:18 #15

• ddp

  are we better off in the long run?
  

  25.1.2012 21:42 #16

• ivymike

  I wanted to stock up on HDD's as I have multiple machines at my house....I guess it'll have to wait.....

  26.1.2012 04:21 #17

• FreddyF

  From the prices, I would think all hard drives are made in the same factory, or at least in the same river valley. Not only have prices more than doubled here (Italy) but the selection keeps going down. I haven't seen a full size external drive for a good month, from any company.
  
  
  
  This is an interesting display of suppply and demand. Hopefully the "manufacturers" will diversify their production. It is sad, but I think they have done what most conputer "manufacturers" have done and outsourced their manufacturing to the point that HP, Lenove, Apple, DELL, ASUS and Acer are not manufacturers anymore, they are just resellers. At this point FoxConn should buy a distribution network and start selling their own computers direct, they could do it far cheaper for better quality than anyone else.
  

  27.1.2012 10:32 #18

• Mez

  Well I could have used another 2g disk but after shopping I recycled some older disks. I am encouraged that others are doing the same. Originally posted by FreddyF: From the prices, I would think all hard drives are made in the same factory, or at least in the same river valley. Not only have prices more than doubled here (Italy) but the selection keeps going down. I haven't seen a full size external drive for a good month, from any company.
  
  
  
  This is an interesting display of suppply and demand. Hopefully the "manufacturers" will diversify their production. It is sad, but I think they have done what most conputer "manufacturers" have done and outsourced their manufacturing to the point that HP, Lenove, Apple, DELL, ASUS and Acer are not manufacturers anymore, they are just resellers. At this point FoxConn should buy a distribution network and start selling their own computers direct, they could do it far cheaper for better quality than anyone else. I hearty suggest buying a few nextstar boxes and load them with internals when the prices go back to normal. You pay more but you get what you pay for. Most externals have minimal power supplies which shortens their life. Most externals are packed with garbage.

  28.1.2012 08:47 #19

• FreddyF

  Originally posted by Mez:
  I hearty suggest buying a few nextstar boxes and load them with internals when the prices go back to normal. You pay more but you get what you pay for. Most externals have minimal power supplies which shortens their life. Most externals are packed with garbage. I am looking at something like a qnap 4 to 6 bay NAS or getting a cheap desktop and using it as a server. I need 6-8 TB minimum today, to cover the external drives. I need to do a lot of research, to find out what will work best for my network.
  

  28.1.2012 13:51 #20

• Mez

  Well then you should not be shopping for external drives which are made from junk but a raid or a NAS. Even with high speed networks the network will be the bottleneck. A raid can be accessed by one computer at high speed 3x faster than the fastest network pulling from 1 disk at a time and 6x if you pull from 2 disks at a time, while a NAS will connect to all devices at network speed.

  29.1.2012 10:28 #21

• kfir1

  Why the HELL these hard drive manufacturers have only one manufacturing location and of all places a country that floods every year. They need to put these factories on STILTS.
  
  There are other countries in Asia that are not below sea level. A great place is the Philippines.

  1.2.2012 01:04 #22

• ddp

  typhoons there.
  

  1.2.2012 01:25 #23

• kfir1

  Originally posted by ddp: typhoons there. But higher grounds and typhoons cant destroy a concrete building.

  1.2.2012 02:19 #24

• ddp

  can take the roofs off, blow out all the windows & doors damaging the interior, knock power lines out & cause landslides from to much rain.
  

  1.2.2012 13:19 #25

• Mez

  Without knowing how factories are constructed over there, what kind of equipment is used and where the factories are you can't assume much other than you can't assume anything.
  
  I remember when a work-make was complaining how lazy the workers in Demoins Iowa were because they hadn't answered the phone in a week. The boss asked don't you watch the news? The 55 ft leavy broke when flood waters smashed it and the city was under 70 ft of water. This was in the heart of the US. Stilts would not have helped even if they were 50 ft high. The water would have eroded them.
  
  kfir1 you don't have a clue! Mother Nature can be a Bitch!

  1.2.2012 14:24 #26

• LordRuss

  Then to simply comment on everyone's statements as a whole & play Devil's Advocate; then there really is no reason for the manufacturers to have built redundant factories in other areas so as to pick up a bit of the slack.
  
  By the simple facts of each sides debate here Ma Nature is gong to do as she pleases (no doubt) & as I have said in the past, corporations just simply refuse to have redundancies in place for just such an emergency.
  
  These idiots really do think they'll get out of town with their share & leave the next asshole holding the bag.
  
  They all know better. It's belligerent greed warped ethics & non existent morals on any plain of existence that allows for this & similar business models to push the economy into the state that it's in. Then like turd bending toddlers, when one sees another getting away with bad behavior the rest think they all have to try & get away with it too.
  
  Maybe Ma-Nature is trying to tell us something else here?
  

  http://onlyinrussellsworld.blogspot.com

  1.2.2012 16:20 #27

• Mez

  LordRuss, maybe the factories were not primarily built to survive a typhoon. Just like it might be prudent to have your abode burglar proof. Reality is most aren't. Do you have a burglar alarm or bars on your windows? Probably not, that is normal.
  
  If you are starting up a manufacturing unit of what ever, you ALWAYS put it in the same place as another one. Why? You hire persons that have done the job before. I live near a Netflick hub. When Blockbuster went in to competition they put their hub in the same city. The government has moved many operations out of DC so they can save money on personnel. I know many operations can't keep programmers. Programmers take the job because they are out of work but jump ship when they can move back to DC.
  
  There is lots of low level technology that you will either have to learn the hard way if you can't hire persons with experience.

  1.2.2012 17:32 #28

• ThePastor

  Did it take Iowa three years to rebuild?
  

  "But the bigger point here is that UMG has effectively admitted this takedown was never about copyright. They demanded YouTube censor Megaupload and justify that by saying they have a contract which allows it so its fine. Its painfully clear what they would do with a law like SOPA that gives them much more power"

  1.2.2012 20:20 #29

• Mez

  ??? Maybe???

  2.2.2012 18:02 #30

• LordRuss

  Originally posted by Mez: LordRuss, maybe the factories were not primarily built to survive a typhoon. Just like it might be prudent to have your abode burglar proof. Reality is most aren't. Do you have a burglar alarm or bars on your windows? Probably not, that is normal. That's not 'exactly' where I was coming from, but I see your point.
  
  I suppose another avenue I should come from would be to say is, they KNOW they are in an an area that gets typhoons. So, even though being 100% waterproof isn't always going to be possible, being a fortune top 10 company on the planet can most certainly afford you a redundant manufacturing plant elsewhere on the globe "just in case". That's basically where I was coming from.
  

  http://onlyinrussellsworld.blogspot.com

  3.2.2012 09:40 #31

• Mez

  Human nature is not to do much in the way of corrections. They are insured.
  
  Yes, I agree it would be prudent to have at least one other location, which all they do. I think everyone has missed what I think was going on. HD prices have been slipping this gives them an excuse to up the prices but not enough customers are 'buying it'. They were doing a gas price increase with HDs. The price at the pump does up the day after the disaster. That wouldn't work either if we could all hold off buying gas for 6 months.
  
  I suspect the prices will come down now that they were bloodied by the gambol.

  3.2.2012 10:05 #32