HDD prices set to ease slightly by the end of the month


HDD prices set to ease slightly by the end of the month

Simon Quicke

Hard disk drive prices, which have been inflated by the impact of the Thailnd floods, should start easing at the end of the first quarter as shortages start to ease.

The latest review of the state of the HDD market from industry watchers IHS highlighted the across the board price rises that were introduced by manufacturers in the fourth quarter.

Supply problems and ongoing issues getting factories back online meant that ASPs surged in the last three months of the year with Seagate's rising from $55 in Q3 to $68 a quarter later.

"Pricing will start to decline at the end of the first quarter this year for some HDD products, with component shortages finally easing and production increases kicking in from plants that had escaped flooding," the analyst stated.

But the prices are going to take time to get back to pre-flood levels as a result of reduced competition in the market following the acquisitions by Seagate of Samsung and WD picking up Hitachi GST and the costs incurred by manufacturers that had to invest in fresh factory facilities.

"One other factor could impact market values for the rest of the year. If the new, super-thin Ultrabooks promoted by Intel take off - and there is every indication that they will - HDD prices could remain elevated throughout 2012, IHS believes," the analyst house stated.

Pricing in the industry is clearly fluctuating with IHS predicting last month that the high ASPs would last for at least another two quarters because of the impact of shortages.
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