Hard Disk Drives May Get More Expensive - Market Rumours

Disasters in Japan May Boost Prices of Hard Drives

by Anton Shilov
04/05/2011 | 09:16 AM

Shortages of controllers and other components have already impacted pricing of mainboards and will thus boost costs of other similar devices, such as graphics cards. In addition to that, contract prices of hard disk drives (HDDs) are also likely to get higher because of the same reasons.


The recent earthquake in Japan interrupted production of controller chips for motors used in hard drives at Texas Instruments' plants and the latter may not resume shipments until September, according to sources of DigiTimes web-site. As a result, manufacturers like Seagate Technologies or Western Digital will have to rely on controllers from STMicroelectronics, which will boost pricing due to lack of competition.

Showa Denko K.K. (SDK), a leading producer of platters for hard drives, in mid-March also had to shutdown its plants and suspend operations at its sites in the Tohoku and Kanto regions for three days. SDK resumed production on March 17, centering on basic chemicals necessary for the supply of drinking water, food, medicine and electricity and decided to give priority to items urgently needed by society. As a result, SDK's production volumes are limited for the time being, due to limited supply of electricity, raw materials and fuels.  Furthermore, the confusion of road networks and the shortage of fuel for trucks are disrupting logistics. Thus, SDK has to discuss shipment schedules with individual customers. Ultimately, it supplies of Showa Denko K.K.'s platters for HDDs will be limited.

Channel prices on hard disk drives have already increased by 10% - 15% and due to a shortage of controller chips for motors used in hard drives, prices of HDDs in the OEM market are likely to increase by 5-10% in the second quarter. Eventually, pricing on hard disk drives will continue to grow, but it is not clear by how much.

Companies like Seagate and Western Digital did not comment on the news-story.